All investors greatly desire and are motivated by a clear picture of a company's exit strategy, or the timing and method through which they can "cash in" on their investment. This picture best comes into focus when the key valuation and liquidity drivers of the company are clearly delineated. An excellent method to accomplish this is through descriptions of comparable firms that have had successful liquidity events, either through acquisition, merger, of initial public offerings (IPOs).
It is helpful to show other companies in your market, or similar companies in other markets, who have successfully exited, and how and why these companies were successful. For instance, were they successful since they acquired a large customer base? Or were they successful since they accomplished fast growth or high profit margins? It is also important to tie their success to their exit price. Was the exit price based on earnings or the number of customers the firm had at the time? The business plan should tie these metrics (e.g., exit price of $X per customer) to the business to determine its future price.
The most common exit strategies in business plans are IPOs or acquisitions. While the method of exit is not always crucial, the investor often wants to see the decision to better understand the management team's motivation and commitment to building long-term value. If acquisition is the selected exit path, then the business plan should detail potential companies that might want to acquire the firm in the future and why. Likewise, if an IPO is expected in the future, the business plan should document the financial metrics of the company that make it ripe for this type of exit.
In most cases, investors only make money when the business reaches a successful exit event. As such, it is critical that business plans explain the expected exit, detail why this exit was chosen and validate a realistic exit price.
As President of growthink business plans, Dave Lavinsky has helped the company become one of the premier growthink business plans. Since its inception, Growthink has developed over 200 business plans. Growthink clients have collectively raised over $750 million in financing, launched numerous new product and service lines and gained competitive advantage and market share.
house refresh service Morton Grove ..Business planning is widely acknowledged as one of the keys... Read More
Every decade we seem to come up with a buzz-word... Read More
The decision to sell, or not to sell your business... Read More
One Research Scientist at the Hewlett-Packard (HP) Imaging Systems laboratory... Read More
There is a story, about a business owner who wasn't... Read More
As fast as you can say business disaster, your business... Read More
If you own a pressure washing business one of the... Read More
Building a dynamic small business is a constantly evolving, increasingly... Read More
ACTION PLANNING: Action Planning is a process to develop strategies... Read More
Business owners and entrepreneurs are, by nature, risk takers and... Read More
The time when a website was just a simple set... Read More
Is your business growing as fast and effectively as it... Read More
Many of Ohio's downtown areas are in need of upgrading... Read More
Whether you are seeking capital for your company or are... Read More
Is there a 'magical' way to exponentially grow your business?It's... Read More
After 128 years of business, a household word, Montgomery Wards,... Read More
Strategic planning is vital while starting a new business or... Read More
Entrepreneurs often give little if any consideration to their computer... Read More
There are no "rules of thumb" in the pursuit of... Read More
Here is an abstract thought on studying nature and the... Read More
If you are looking for a partner, funding, angle investor... Read More
Scenario OneDuring a recent presentation, a business owner was given... Read More
If you've ever listened to Warren Buffett talk about investing,... Read More
You have heard that there is extra money on the... Read More
When someone mentions business planning we have been conditioned to... Read More
cleaning service near Mundelein ..Businesses tend to avoid doing their annual business plan thinking... Read More
There's nothing automatic about corporate growth, particularly in the information... Read More
Microsoft Great Plains fits horizontal markets clientele and in case... Read More
A well known, national chain of restaurants discovered that certain... Read More
You have invested a lot of time and energy on... Read More
Many of Ohio's downtown areas are in need of upgrading... Read More
A strategic alliance is when two or more businesses join... Read More
Note to Rite Aid and CVS: It's not about the... Read More
You might be thinking to yourself, "Why should I waste... Read More
One of the key challenges for any business is to... Read More
The decision to sell, or not to sell your business... Read More
Although North Americans were the dominant population on the Internet,... Read More
Why do so many companies languish and watch as their... Read More
1. Largest Selection -One way that you can make your... Read More
"Rubbish!" shouted the large, aggressive man in the red-striped shirt... Read More
If you are looking for a partner, funding, angle investor... Read More
The new check cashing instant clearing will take some time... Read More
Obviously, there will never be an actual water shortage since... Read More
Here's a really simple way to make sure your plans... Read More
One of the difficulties we face in our industrialized age... Read More
Possibly THE most frequently asked question of me is "What... Read More
So you've decided to write your own business plan because... Read More
Mobile auto detailing equipment becomes very inexpensive around March each... Read More
A recent conversation started with a typical question, "How's business?"... Read More
The format of a Business Plan is something that has... Read More
Strategic Planning |