Practical Steps to Grow and Exit Your Business

Having built and sold three businesses, Steve Bird, one of our Business Growth Advisors, has both professional knowledge and practical experience to share with SME owners. Here he looks at practical steps to grow and exit your business:

 

For many SME owners, building a successful business is just the first step. Equally important is planning for a profitable exit when the time is right. Whether you intend to sell, pass the business on to family, or bring in investors, having a structured growth and exit strategy ensures you maximize value and achieve a smooth transition. It is wise to remember that there are only three ways to exit a business – in a box – without a cheque – or with a cheque. I know which I’d prefer. 

Here are some practical steps to help you grow your business and prepare for a successful and profitable exit. 

 

Establish a Clear Growth Strategy 

Growth doesn’t happen by chance—it requires a strategic approach; a business growth plan. Start by setting clear goals, identifying your target market, and optimising your product or service offering. These strategies will accelerate your growth: 

  • Define your “Golden Thread”: The unifying elements that connect your business to its ideal customers. 
  • Expand Your Market: Identify new customer segments, enter new geographical regions, or explore adjacent markets based on your golden thread. 
  • Enhance Your Product or Service: Continuously innovate to stay ahead of competitors and meet customer needs. 
  • Leverage Technology: Implement automation, data analytics, and digital marketing to improve efficiency and reach. 
  • Form Strategic Partnerships: Collaborate with complementary businesses to tap into new opportunities. 

Your business growth plan will pull these elements together into a coherent and actionable structure. 

 

Strengthen Financial Performance 

A business with solid financials attracts better buyers and investors. Improve your financial health by: 

  • Optimising Cash Flow: Ensure efficient invoicing, reduce unnecessary expenses, and negotiate favourable terms with suppliers. 
  • Boosting Profitability: Focus on high-margin products or services and streamline operations. 
  • Managing Debt Wisely: Keep a balanced debt-to-equity ratio to enhance business stability. 
  • Maintaining Accurate Financial Records: Buyers will scrutinize your financials, so keep them transparent and well-documented. 

Build a Strong Team and Leadership Structure 

Many SME owners are deeply involved in day-to-day operations, but a business that relies too much on its owner can be difficult to sell. To make your business more attractive to buyers, you must try and make yourself operationally redundant. Work on the business not in the business: 

  • Develop a Capable Leadership Team: Delegate responsibilities and build a management team that can run the business effectively. 
  • Create a Culture of Accountability: Encourage employees to take ownership of their roles and contribute to company growth. 
  • Implement Succession Planning: Have a plan in place for leadership transitions to ensure business continuity. 

Increase Business Value Through Differentiation 

A unique value proposition sets your business apart and makes it more attractive to buyers. Consider these ways to enhance value: 

  • Brand Strength: Build a recognisable brand with a loyal customer base. 
  • Customer Relationships: Long-term contracts and repeat customers demonstrate business stability. 
  • Intellectual Property: Patents, trademarks, and proprietary technology increase business worth. 
  • Scalability: Businesses with the potential for expansion often attract higher valuations. 

Plan Your Exit Strategy Early 

Exiting a business is a process, not an event. The earlier you plan, the more options you’ll have, When I set up my last business, within the first year we decided to structure it for a Trade Sale. 6 years later we sold to our second largest client.  

  • Selling to a Third Party: This could be another business, a competitor, or a private equity firm. 
  • Management Buyout (MBO) or Buy-In (MBI): Your current management team or an external team acquires the business. 
  • Family Succession: Transferring ownership to family members while ensuring operational continuity. 
  • Public Offering: Listing your company on a stock exchange if it has significant growth potential. 

Get Professional Advice 

I wish I had somebody who had walked the walk beside me on my journey to my Exit. Navigating business growth and exit is made easier with expert guidance. 

  • Elephants Child: Help identify buyers, negotiate terms, and structure the deal effectively and project manage the whole transaction. 
  • Accountants: Ensure financial statements are in order and tax-efficient. 
  • Business Valuators: Get an accurate valuation to set a fair selling price. 
  • Legal Advisors: Handle contracts, due diligence, and regulatory compliance. 

Prepare for Due Diligence 

Buyers will conduct thorough due diligence before acquiring your business. Be ready by preparing properly. Spend a year pulling your DD together before you need it will identify gaps and you will have time to fix them.  

  • Financial Statements: At least three years of audited financials. 
  • Contracts and Agreements: Client, supplier, and employment contracts. 
  • Legal and Compliance Documents: Ensure regulatory compliance and intellectual property protection. 
  • Operational Processes: Document key business processes for seamless transition. 

Conclusion 

Growing and exiting your SME successfully requires planning, strategic execution, and expert advice. By strengthening your business fundamentals, increasing its value, and preparing early, you can ensure a profitable and smooth transition when the time comes. Whether selling to a third party, passing it on to family, or transitioning to new leadership, a well-planned exit strategy secures your legacy and financial future. 

If anything resonates, please contact Steve on:  s.bird@elephants-child.co.uk or 077121 91577. 

Curious about what your business is currently worth? We offer a free desktop valuation, plus the option of a follow up call to discuss the results, so you’ll know if your business will provide you with the rewards and return on investment you need.