If you’re considering selling your company in 2022 or beyond, the time to begin exit planning is now. It can take 18 months or longer to successfully sell a business. The more time you have, the more successful your exit plans are likely to be. Meeting with an advisory team can help you identify areas for improvement in time to make a meaningful change in the value of your business and its ultimate sale price—especially as COVID-19 related economic uncertainty continues to persist. Here are some factors to consider as you weigh your 2022 exit plans.
The Current State of the Economy
The economy has shown some incredibly promising signs over the last 12 months, but the true post-COVID recovery can only begin when uncertainty ends. While executive confidence is increasing, there’s still plenty about the future that we just don’t know. GDP has grown, and the global economic recovery is already underway. But will this recovery continue, increase, slow down, or even reverse? That depends on what the virus does next. Any decision you make right now will be something of a gamble, but of course, that’s always been the case when selling a company.
The pandemic has intensified many of the trends that were already shaping the economy, including global growth shifts, industry disruption, and an ongoing need for cooperation across governments and cultures. The gap between the best and worst performers in business was growing prior to the business, and has deeply widened.
The crisis of today is a humanitarian and healthcare emergency, compared to the financially driven breakdown of 2008 to 2009. Nevertheless, this last downturn does offer many lessons for companies hoping to recover and eventually thrive. In the prior recession, the most successful businesses were those that reacted quickly and made bold, flexible moves. They grew 30% faster. We’re seeing that again, with greater growth and more stability among companies that pivoted to online operations rather than aggressively clinging to the ways of the past. Businesses that have found ways to utilize new technologies or profit from the pandemic stand to thrive.
The paths for different industries and nations will vary, but it’s critical to extend your planning beyond 2022, looking to a future recovery and assessing how the pandemic might affect your industry over the longer term. Companies that can think creatively about the future gain a competitive edge. And that means more options when it’s time to plan your exit. As you weigh options for 2022, do the following: