Four popular exit strategies

Every business, no matter how big or small, has to part with its owner or proprietor at some point. Situations can arise that cause you to sell your business or pass it down to younger family members.

At some point, in some way, you will part from your business. Fact.

That’s why it’s a good idea to plan your exit in advance so that you are constantly working towards this ultimate goal and that necessary procedures are in place, when needed, to finally part with your company – successfully.

Here are four options available to you:

Float your company

Floating your company on the stock market can be a hugely rewarding way to exit your business, or at least step back from it somewhat.

However, flotation is unsuitable for the majority of businesses given the size and growth needed to attract potential investors and to be permitted to float your company on the stock market.

If your company does not have secure revenue streams and strong growth prospects then you can eliminate floatation as an exit option from your business.

Sell your company

This can involve either selling to external buyers, or selling to internal buyers i.e. employees.

Although selling to internal buyers may not be as profitable as selling to a trade buyer, it can often be a simpler process given that they already understand the business and its operations.

Selling your business can be made easier if you can:

· Show year-on-year increasing profitability

· Create a high-quality product or service

· Develop an innovative product or own intellectual property

· Build a strong customer base

· Recruit a high-quality team

· Maintain premises and assets in good condition

Family succession

Family succession is a case of handing the business down to another generation; whether that is a son, daughter, cousin, or nephew.

This allows you to maintain some degree of involvement in the business and keep it ‘in the family’.

If you are planning to take this option, try to involve your chosen family member(s) in the business as early as possible, not only to enable them to get a grasp of the processes and procedures, but also to develop their interest in the business and encourage them to take this career route.

Close your business

This is the simplest way to part with your business.

It is often the case in ‘lifestyle’ type businesses that the owner delivers all value therefore deeming the business inoperable, and indeed unsellable, without their skills or knowledge.

To help you decide what exit option is most suitable for you and your business, get in touch with me, Bob Brown, today on 01709 810081.

Why you need an exit strategy for your business

In my line of work, I deal with people who either don’t have the time (or the patience) to build an exit strategy for their business.

Unfortunately (although not for me), this represents the majority of business owners.

They do not appreciate the sheer importance of getting their exit plans down on paper and finalised.

Without proper planning and preparation a business has no clear purpose. Without a clear purpose, it has no direction. And without direction, how will you know when success has been achieved?

The reason most people go into business is to, eventually, boost their own personal wealth. This is the main drive for economic development, the pursuit of personal wealth and, ultimately, the pursuit of a better standard of living.

Building an exit strategy whilst the company is in its pre-start or infancy stages gives you the ability to mould and shape the development and direction of the company to ensure that this strategy can be realised and that your goals can be achieved.

In fact, not only this, but planning at this stage gives business owners a distinct advantage in terms of the mindset and situation that they are in.

See, when a business is launched, the owner is often in a strategic, relatively calm mindset. When things start to become a little busier and business begins to boom, the business owner can become a little less strategically-minded and more wrapped-up in the day-to-day operations of the company.

This means, business owners who leave exit planning until the very last minute are in a disadvantaged state of mind to that of business owners who plan their exit from the company in good time.

Having the plan written and developed at a point where they were in their clearest state of mind, in terms of goals and objectives, means that they have had the opportunity to follow this plan and know when they are at the stage to exit their business for maximum ROI.

Business exit strategy companies can help you to develop and build an exit strategy from the outset, enabling you to give yourself a distinct advantage when the time comes to part with your company.

This is what we specialise in. We have helped many business owners to maximise the value of their companies. Let us help you to maximise the value of yours, get in touch today on 01709 810081.