Business owners should learn PE terminology, valuation methods, and deal structures years before being approached. Planning an exit 3-5 years in advance gives you bargaining power and lets you set your target price instead of reacting to an offer.
Really, the catalyst point is to get educated and learn a little bit more. What's the glossary of terms? How are businesses valued? Teach me how to have a significant company before I go to market 3 years from now. If you get approached by that private equity group, you'll be dangerous to know, hey, maybe you should talk to my advisor about that, right? Like, I should have some representation. Or maybe even before that private equity offer shows up, you actually already know your options. You already understand your ideal deal structure. You know who your buyers might be. That's the beauty of it, right? If we're working on our exit right now, even though we might be 3 to 5 years away from exit, We have freedom and options. It's really just about what price do I want? What are the net proceeds I'm looking for? And then what terms do I want? The real answer is probably let's take a step back, get educated so that you do know what due diligence is, you know what an LOI is, and you know what that private equity person is even about to look for.
