What’s your Exit Strategy?

After years of building up your business you have now decided it is time to move on. But what will happen to your business?

If you own a business, you should have an exit strategy.

What is an Exit Strategy?

An exit strategy is a plan of what will happen to your business, its employees and assets should you choose to leave the company. The plan should also consider what will happen should the business fail.

There are various types of exist strategies from strategic acquisition to management buyouts or selling the business to someone you know. They may also include plans for mergers or liquidation of the business.

What should your exit plan cover?

This will depend on the size of your business as well as your industry. However, there are a few points that all exit plans should consider:

• Objectives – What do you intend to get out of the business? This could be your return on investment but it may also include building a legacy.
• Intentions – This section will outline what you plan to do with the business when you reach the time you wish to leave. This could include selling the business, a merger or even closure of the business.
• Timeframe – When are you planning to leave the business? Knowing when you plan to leave means that plans can be put into place in advance.
• Market Conditions – This will affect your plans for exit. If the market is flourishing, you may find a buyer quickly and sell for a good price. However, if this isn’t the case your sale may take longer or not reach the price you predicated.  

Selling your Business

As a business owner, it’s vital to have an exit strategy if you think you will ever need or want to sell your business. An exit strategy is a plan for how you will sell your business. It doesn’t have to be complex, but it should identify what you expect to get from the sale and the expected timeline and conditions.

You might want to sell for many reasons, such as retirement, illness, or simply wanting to move on to something new. Exit planning gives you the ability to control the sale of your business and get the best possible price for it. It also allows you to plan for the future of your employees and customers.

Without a plan to leave, you could sell your business for less than it’s worth. So, if you think that you might sell your business one day, be sure to put an exit strategy in place now.