It’s Always Been About Value: Exit Planning in a Post-Covid World

We are living in a world of Have’s and Have Not’s.  No – I’m not talking about what is going on with the middle class or the 1% or anything of the sort.  I’m talking about this new world that we as business owners (or your clients, if you are an advisor) find ourselves in.   We’ve spent the last several months talking about V- vs. U- shaped recoveries, various stages of “opening up,” and what the “new normal” looks like.  We’ve added a whole new series of words and phrases to our everyday lexicon.  But one of the things that we are only starting to talk about is what all these mean for businesses – and, more specifically, their owners/shareholders. Simply put- a few small companies have thrived; most have been treading water at best, and then there is a not-insignificant number that merely has been wiped out.

What does all of these mean for entrepreneurs and founders that had been thinking about an exit (and when I say “thinking about,” I don’t mean soon… I mean ever)?  We’ll look – I spend a lot of my time working with clients on what some people might call Exit Planning.  And the thing about it is that we don’t spend much time planning for an exit.  What we spend time on is value creation.

The Biggest Impediment to an Exit is Value

The number one reason companies either don’t or cannot sell anything to do with a checklist of items that you should have run before going to market.  The reason is the value gap between owner expectations and market reality.  Owners either need or want more than the market is willing to pay.   So how do we fix that?  We need to create value.  Period.  Full stop.

Related: Talk about value early and often. 

How Value Scout is Responding

First, I’m an entrepreneur.  I’ve run many companies (I haven’t had a “real” job since 2003).  My heart aches for the entrepreneurs, their employees, and their families who this crisis has decimated.  There is no amount of planning or preparation that could have helped some of these companies out.   They’ve simply been OBE, and that sucks.  I hate it for them and hope they have the resiliency to pursue their next dream and make it awesome.

Second, the Value Scout platform is 100% geared towards value creation.  We are laser-focused on value creation, from assessing current market value and identifying the “value gap” to modeling your “Company of the Future” and, finally, value-based planning.  That said, we also have a series of tools that can be used by owners and advisors that are more assessment/stress test tools.  They are part of our core platform.  To get those tools into the hands of more people, we’ll be creating a “Light” membership that gives access to those areas.

Finally, we are in this with you.
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Author Summary

Dan Doran

Dan Doran

Is the Founder of Value Scout, Quantive and the 2019 Exit Planner of the Year. He is a recognized expert and speaks frequently about M&A, valuations, and developing more deliberate value creation strategies.

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