Develop an Exit Strategy in Advance
Any experienced business person will tell you that timing is everything when deciding to go Out of Business. Part of a business plan is your strategy to exit a winner. That generally means selling your baby when it is at its height. The entrepreneurial spirit that build your business is in conflict with management best practices needed to take your successful business to the next level. Giving over control is hard to do for those self made executives who watched their venture grow.
A well thought out plan can mitigate those feelings of loss and show how your success is just another rung on the ladder. Too many business owners fail to understand the need to transition and often hinder rather than help the growth of their company.
5 Tips on Developing a Sound Exit Strategy
1. Plan your exit when you start the business. Will you sell your company, pass it on to children, or take it public?
2. Take time to understand how your chosen exit affects business planning. Will family members need to be trained to replace you, for example?
3. Consider the cost of each strategy—loss of the ability to keep financial information private if you sell or go public, for example.
4. Be aware that your investors will have their own exit strategies. Be prepared to discuss their desired timetable for exiting your business, how they see it happening and their expected return on investment.
5. Plan well ahead for a satisfying life when you leave your current business. Consider starting another business, teaching, volunteering—or becoming a philanthropist.