Every Entrepreneur Needs an Exit Strategy
An exit strategy:
- Gives your business more direction and clearer focus, since you know what the ultimate aim of your effort is
- Helps minimize future disruptions, both to your business and to your life
- Helps you better manage the tax implications of your departure
- Helps maximize what you get out.
Exit strategy options:
- Keep it in the family: Transferring business ownership to a successor takes considerable planning, from an operational and legal perspective. If you opt to turn the family business over to your heirs, make sure that you have a solid succession plan in place.
- Sell the business to a friendly buyer: One of the easiest ways to offload a thriving business is to sell it. Before advertising a business for sale, put the word out - chances are parties interested in acquiring your business include those in your own network, like customers and employees, even family members. Those who've had some sort of connection with your business in the past are more likely to preserve its legacy - a plus point if you feel strongly about the issue.
- Sell the business to a competitor: There may be strategic buyers out there who wish to snap up your business for its client base; because they wish to take competing businesses out of the market or because they see some synergy with your business and theirs.
- Float the business on the stock exchange: Transforming from a private company to a public company is the method by which many an entrepreneur has made millions: Think Google, Microsoft, or Apple. This one's for the big boys!
- Liquidate the business: Don't wish your business to get in the hands of your competitors. Go public or hand it over to a family member. Then wind up your business - close it down for good and sell your assets. This strategy works well for those who have high-value assets, such as land or equipment. Remember, though, that all debts will have to be paid off first, before you get the spoils.