Sooner or later most business owners hope to achieve a full reward for their labours by selling and realising a substantial capital sum. There is usually only one opportunity to do this, so getting it right is essential.
The EMC Exit Scorechart™ helps an owner identify how attractive the business currently is to a potential purchaser. It is not an absolute score, or a reflection of how successful the business is currently; it is the first step in creating an action plan for the two to five years prior to sale which has, as its prime objective, the maximisation of the business’s value. It should be reviewed regularly to see how progress is being made. Some of the ‘problems’ may never be fully ‘solved’ – e.g. availability of good staff locally – but they can be mitigated.
The price a buyer will pay for a business will reflect the risk/reward they believe is involved. The lower the risk, the higher price – ideally as a multiple of ‘guaranteed’ future profits – they will be prepared to pay. The EMC Exit Scorechart™ identifies the areas of risk which may put off a buyer, or minimise their offer value so this can be addressed, and will also help to identify the type of buyer for whom the business is most likely to be attractive, e.g. trade buyer, or MBO team.
The cost of conducting an initial review and preparing an action plan can be as little as £2,000 for a small owner-managed business.