Business Exit Planning.

One of the most common reasons founders reach out to Founded Partners is for help with exit planning. Selling a business can be a major life event. It takes time, focus, and often a fair amount of work to make the company attractive to buyers. This article explains why a good plan can mean the difference between a smooth sale and a stressful one. We will also explore key considerations such as boosting revenue and profitability, bringing in professional management, and avoiding or managing earn outs.

Why Exit Planning Takes Time


A sale is not something you decide on one day and finish the next. It can take months or even years to build the right structures, fine tune financials, and find interested buyers. That is why we usually advise founders to start planning well before they hope to sell. Early preparation can help you show steady revenue growth and solid profitability, which are big draws for potential buyers.

Boosting Revenue and Profitability


Buyers often focus on the financial health of a business. If your margins are low or revenue is stuck, you might not get the sale price you want. We help by:

  1. Reviewing Your Financials: We look for ways to lower costs or raise prices responsibly.

  2. Updating Operations: Improving processes can help your business run more efficiently and become more attractive to buyers.

  3. Strengthening the Team: Having the right people in place can make your business less reliant on you, which many buyers prefer.

Bringing In Professional Management


One of the ways we prepare a business for sale is by bringing in professional management. Skilled managers can run day to day operations without needing constant input from the founder. That makes your company more appealing to buyers because they see a steady operation that will continue even if you leave.

Reducing the Emphasis on Founder Earn Outs

Many sales include an earn out, which is a period after the sale where the founder stays on to ensure certain targets are met. This can tie you to the business longer than you want. Earn outs are a big deal and should be considered carefully. However, a lot can be done to reduce or even avoid them:

• Having a Strong Team in Place: If your company can run well without you, buyers may not insist on a long earn out.
• Demonstrating Consistent Performance: Buyers are less likely to force strict terms if they see steady growth and solid financials before the sale.
• Planning Well in Advance: If you know you want to avoid an earn out, start planning for it early.

How Founded Partners Helps with Exit Planning


We have worked with many founders to ensure their businesses are ready when the time comes to sell. Our approach involves:

  1. Assessing Your Goals: We figure out your personal and financial targets for the sale.

  2. Reviewing the Business: We look at revenue, profit margins, team structure, and growth potential.

  3. Suggesting Improvements: We identify steps that can boost the sale value and lower the need for founder involvement post sale.

  4. Introducing Professional Management: When needed, we connect you with experienced leaders who can step in and run the company.

  5. Guiding You Through the Sale: We help you prepare for buyer questions and due diligence so you can negotiate a better deal.

TL;DR


Selling a company is a major milestone. It requires time, planning, and a careful review of financials, team structures, and your overall goals. Founders often reach out to Founded Partners because we know how to make a business more appealing to buyers, reduce the need for founder earn outs, and maximise the final sale price. If exit planning is on your mind, we are ready to help you create a clear, thoughtful plan that sets you up for a successful and rewarding sale let’s connect.