Better understanding
The multi-exit strategy
A multi-exit strategy involves establishing different exit scenarios for your company, each prepared to maximize value at different times and in different situations. This means preparing to sell to a strategic buyer, go public, merge with another company, or even hand over part of your business to your employees via a profit-sharing program. The idea is never to put all your eggs in one basket.
By considering several scenarios, you avoid depending on a single option, which may not succeed or be as advantageous as expected. For example, if market conditions are not optimal for an IPO, you may have an option to sell to a strategic competitor who wants access to your resources and customer base.
Get ready
Evaluate the options
To plan an effective multi-exit strategy, start by evaluating the different types of exit that would be suitable for your company and your sector.
Here are some possible options:
Strategic buyer
A competitor or a company in a related sector may want to buy your business to strengthen its market share or gain access to your technology.
Private equity
Private equity funds are often looking to buy profitable businesses that they can revitalize and resell at a profit.
Transfer to employees
Allowing employees to buy back shares via a shareholding program can ensure the continuity of your business while allowing you to reap a portion of your investment.
Initial public offering (IPO)
Although complex and costly, an IPO can be very rewarding if your company is ready to take this step.
The aim here is to prepare for each scenario, to know its advantages and disadvantages, and to understand when it would be most appropriate.
During a sale
Maximize your value
Planning a multi-outlet strategy is also about ensuring that you create maximum value for each potential buyer. Each type of buyer will perceive the value of your business differently. For example, a competitor might consider your customer base to be extremely valuable, while a private equity fund might place more importance on your cash flow.
Showcase your competitive advantages
Whether it's a patented technology, a strong brand, or a solid distribution network, identify the aspects that are most attractive to each type of buyer.
Optimize your processes
Make sure your internal processes are efficient and well documented, as buyers will be looking for a company that's easy to integrate.
Prepare financial and operational audits
Having clean books of account and accurate valuations will boost buyer confidence.
For each exit
Choose the right moment!
Timing is crucial in a multi-exit strategy. Market conditions, economic cycles and the state of your business sector will all play a part in the exit decision. When planning a multi-exit strategy, you need to ensure that you are able to identify the ideal timing for each of your options. This means constantly monitoring market trends, gauging buyer interest, and being ready to act quickly when the opportunity arises.
A well-planned multi-exit strategy can give you great peace of mind, because you know that, no matter what happens, you have several solutions prepared to guarantee your success.