I once heard Jack Nicklaus say that “the key to holing your putt – starts with the tee shot”.  

Whilst I will never get to experience Jack’s masterful play on a golf course, I can hopefully demonstrate how his point can relate to successful exit planning for owner managers.

The tee shot

All entrepreneurs enter business, or start up in business, with the initial goal of being a success.  This is often trying to survive in the early years and always entails working hard and resolving the inevitable issues of a poor bounce, a cross wind, or your business plan slipping off the fairway into the rough.  

The approach shot

Through the growth stage of business, your role as an owner manager is to build on a solid platform and establish your business in the market.  

You will need to consider the breadth of your customer base, the contractual nature of your revenue, your supply chain and its backup, your employee development and their skillset and roles, your market placement, your competition, your branding and image, your cash flow, assets and working capital requirements.  

Depending on where your tee shot went, your approach shot is very important to help make your exit goal more achievable.

The wedge into the green

Now the end is in sight.  Your business has entered a mature stage of its development and you should be planning not only the distance to the green, but where you want to leave the ball to make your putts easier.  

You will likely consider tidying up any unsigned agreements, removing any non-business assets you have collected, start passing your role as the owner manager on to your capable management team, trimming the fat from your operational costs and working on some growth opportunities for an acquirer.

The first putt

This stage is crucial.  Whilst I appreciate you have had three shots already, now is the time to really consider your exit options.  Have you built a business that truly operates without you?  Do you have a management team hungry to develop the business past where you have taken it?  Do you have competitive advantages against your peers?

This is the stage to evaluate the type of buyer for you and the time you want to exit.  Remember here, “exiting” your business can be a while after you have “sold” your business to a buyer of any kind, as you may still need to handover key customer relationships, IP and knowledge to new owners, plus part of your exit value may well rest on future results delivered after the sale date.

The tap in for par

Why work so hard in and on your business over a number of years, to get to within a dustbin lid of the hole, only to miss the two foot final putt?  

You will no doubt have taken trusted expert advice from your caddie over the course of the four previous shots.  

But now you’re stood near the hole and have planned for this exit, use the right caddie to give you the confidence to tap the ball in and make your way to the 19th hole!

Here at Price Bailey, we are set up to help owner managers with every step of this journey.  From business start-up assistance, through business process outsourcing, accounts preparation, taxation advice, strategic planning and eventual exit delivery.  

I hope you can see that Jack knows your exit starts on the tee and that Price Bailey wants to be your caddie every step of the journey.  

Rob Smith is a director at Price Bailey.