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7 essential steps to guiding your business to private equity exit – Growth Business

The journey of entrepreneurship is often compared to navigating a ship through uncharted waters. The goal for many is not just to survive the voyage, but to reach the lucrative shores of a successful exit.

Drawing from decades of experience and my own trials and triumphs in the business world, I’ve outlined seven key strategies to help you prepare, execute, and ultimately succeed in selling your business to private equity.

The earlier you start to prepare your business with a private equity exit in mind, the better chance you have of securing the most profitable deal. But keep in mind that, whilst it is absolutely key that you have a plan in place, don’t fall in love with your plan. Know where you are going but be prepared to pivot multiple times in order to reach your end goal.

1. Understanding your position

Before setting your sights on the horizon, it’s crucial to understand where your ship is currently docked. Are you running a lifestyle business that affords comfort but limited growth, or are you steering a high-growth venture poised for acquisition? Is the business currently fixed around you as an individual? These distinctions are critical as it directly influences your strategies and outcomes. A growth-oriented business often demands constant innovation and aggressive scaling, making it an attractive prospect for investors.

You need to have an accurate knowledge of the strength and weaknesses of your company. Understanding precisely where you are is the key to having a solid plan, so do not shy away from the analysis phase. A useful starting point is this Elephant hunting SWOTE analysis by Argenti.

2. Gauging the waters

Navigating towards a successful exit requires more than just hard work; it requires strategic foresight. You should be regularly assessing your company’s strengths, weaknesses, and market position against short-and-long-term external forces. This includes understanding your financial health, operational efficiency, and competitive standing.

Remember, private equity firms invest in potential. They look for businesses with a strong foundation that can withstand the rough seas of market fluctuations and economic downturns.

And be sure you have an acute knowledge of your financials. Many founders are critically unaware of their exact financial situation. If this isn’t your specialism, hire someone that can help you digest and understand this crucial information.

3. Preparing for the voyage

Preparation is your safeguard against the unpredictable. This means getting your financials in order, ensuring your operations are efficient, clients are happy, and your business model is scalable. These are key elements you will need to demonstrate in your deck and business plan to potential PE partners so lay the necessary groundwork.

It also involves building a strong management team. A robust team not only enhances your business’ operational efficiency, but also assures potential investors of the company’s stability post-exit. Your key people should be aware when you have started talking to private equity as they will be key to maximising company value and will also be under scrutiny during the due diligence process.

4. Engaging with private equity

Engaging with private equity is akin to choosing the right crew for your journey. Not all investors are created equal, and finding the right partner who shares your vision and offers not only capital, but strategic guidance is crucial. Understand the types of private equity firms, their investment strategies, and their industry preferences. Remember to do your due diligence on potential firms to ensure they live up to your expectations and needs. This could be through talking to other businesses who have worked with the firm.

Prepare to be scrutinised closely and be transparent about your business’ performance and potential. A truthful and optimistic presentation of your business can significantly enhance your credibility and attractiveness as an investment.

Do not wait for the exact moment you are ready to sell before starting to engage with private equity. It takes a long time to develop trust from both sides and to negotiate a mutually profitable deal. If this is your proposed exit strategy, you want to be building a positive business brand as early as possible to demonstrate longevity, customer satisfaction and industry expertise.

They might even end up approaching you first – and if they do, remember to still do your own due diligence to secure the best deal.

5. The art of navigation: negotiation

Once you have private equity interest, the art of negotiation determines the smoothness of your journey towards exit. This stage requires a keen understanding of your business’ value, the intricacies of deal structures, and the strategic foresight to align your interests with those of the investors.

The negotiation phase is not just about agreeing on a price, but also setting the terms that will govern your relationship post-deal. The following post-offer due diligence process will be meticulous. Ultimately, private equity want the deal to go through, so work with them closely and prepare thoroughly.

6. Life after exit

Many entrepreneurs focus so intently on the exit that they neglect to plan for life afterward. Exiting is not the end of your journey but the beginning of a new chapter.

You could choose to retire, start a new venture, or engage in philanthropy. Whatever you decide, planning for life after exit is as crucial as the exit itself. Ensure you have a strategy to manage your newfound wealth and freedom, and consider your role in the business, if any, post-sale.

7. Emotional compass

Navigating towards an exit is not solely a financial or strategic effort; it is an emotional one as well. Selling a business you’ve built from the ground up can be emotionally taxing. Where you were once making the decisions, you are now giving up all or a large proportion of control to another party, and this is not an easy step for many founders.   

It’s important to acknowledge and manage these feelings as you approach the exit. Support from family, friends, and professional advisors can provide the emotional anchorage needed during this transformative time. Acknowledge these feelings and ground yourself in possibilities that await you post-exit.


Steering your ship towards a successful exit is a multifaceted process that requires more than just business acumen. It demands a deep understanding of your business’ current state, meticulous preparation, strategic engagement with private equity, skilled negotiation, and emotional intelligence. By preparing diligently and navigating wisely, you can maximise your chances of exiting successfully and spectacularly. The journey towards a successful exit, like any great voyage, is challenging but immensely rewarding.

Read more

Why every business owner should have an exit plan – Almost half of UK business owners admit to not having an exit plan. Yulia Barnes of Barnes Law explains why you should

Partial exits: a balancing act – If it’s done correctly, a partial exit can advance your company by introducing new people with different skills and experiences, all the while allowing you to enjoy some of the wealth you have generated

Employee Ownership Trust – another way for you to successfully exit – Why business owners planning to sell their enterprises should also consider Employee Ownership Trusts

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