No one really wants to think about an exit strategy at the beginning of a new business, but it is something that has to be considered at some point, and the sooner you have a plan the better. There are several options, but the one that will work best for you may not be obvious without a little research and preparation.
A Family Affair
Having a family business is a lifelong dream for many entrepreneurs, and if that is your exit plan it can offer many benefits. It allows the opportunity to groom a successor, and it makes it possible to see your hard work continue on after you are not in it hands on anymore. Of course, there is always the potential for the chosen successor to not be uninterested. For this reason, it is always good to have a backup exit plan in the case of a family affair.
A Take Over (Or Give Over)
Selling your business to another business is a viable exit strategy in many situations. This is especially true if there are businesses of the same type growing at the time you are looking to get out. They get a turnkey operation, saving themselves tons of time, and you get a buyer who is motivated to pay for the convenience of having virtually instant growth. Sometimes the profit is more in this situation, depending on how awesome your business is going to be for the other business.
Sell to the Employees
The good thing about this strategy is it can be started well before exit time. Employee profit sharing programs are a great way to keep the employees interested and invested. When the time comes to cut the strings, you can rest knowing you trained them, and they care for your business like you did.
IPO or Open Market Sell
An IPO, or Initial Public Offering, can be a good choice. However, depending on how it is written, you may not be able to get all of your capital out immediately. You could also try to sell to the public in the open market to only one or two buyers. If this is going to be an option, you need to start grooming your business for a sale ahead of time.
This is the least desirable option, but sometimes it is the only option.Basically, you sell everything and hope you make enough to cover debt and make some sort of profit as well.In many cases however, it is the only option, unless there is nothing to sell.
Until exit time, let Biz2Credit help your business thrive.Our network of lenders is standing by to offer a variety of small business financing options. Visit Biz2Credit.com today for more information.