Abraxas Business Services: Exit Strategy

Our specialty is working with owners to develop an achievable exit strategy designed to make the business more attractive to potential buyers. By doing this, when the owner does decide to sell, the business will be positioned to demand a better price, with better terms and a quicker sale.

The value of a small business is primarily determined by its cashflow over the past three years. Cashflow, or the prospect of future cashflow, is what a prospective business purchaser is really buying.

You may be tired of your business, you may be thinking about spending more time with your kids or grandkids, or you may have a yen to go fishing. But for at least one and preferably two years before you sell your business, you need to be totally focused on driving sales and improving cashflow. These are the two factors that will primarily determine the price you get for your business when you put it up for sale. Consider these facts:

Abraxas can help you take steps now that will make your business more attractive to a purchaser later. We will also help you plan the exit strategy that makes the most sense for you and your business - whether it is selling to a third party, to employees, to relatives, or merging with a strategic partner. Your business is your ticket to a great retirement or your next opportunity. Doesn't it make sense to take steps now that will result in more value to you when you do decide to put your business up for sale?

So how do we approach helping you with your exit strategy? There are 4 critical steps in developing the strategy:

Step 1: Fully understand the owner objectives including owner plans, legacy considerations and deal structure implications.

Step 2: Assess Environment: Conduct a "mini due diligence" to understand key issues and opportunities from a buyer's perspective, and assess likely exit scenarios including most likely types of buyers.

Step 3: Gap Analysis: Determine the gap between estimated current business sale proceeds and desired business sales proceeds. Determine the types of actions required to close the gap.

Step 4: Develop Plan and Implement: Assess the alternative and develop exit plan components.

We work closely with the owners financial and tax advisors during the exit planning process.

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