For someone looking to exit their business, it is important to have an exit strategy. Leaving a business that you helped build can be emotional and overwhelming. Normally there are two ways one could think of before calling it quits. One is to either sell it to a new owner and the other either to liquidate and close the business. Consider the following steps when looking to plan an exit strategy. Selling your business to new owners could include looking for a trusted buyer, to ease up on the day-to-day activities of the organization. The seller in this case might allow the buyer to make his payment over time from which both parties can benefit. The one looking to sell will keep on getting the money whereas the buyer can go about operating the business without making a big investment. With this kind of transaction also, the seller remains there to guide the buyer of the business. However, this form of exit strategy comes with its own pitfalls such as selling the business at a much lesser amount than it should along with damaging the relationship the family has.
The other exit strategy that looks to liquidate and close the business can be an ideal way to repay both your investors and shareholders of that business. It comes in two forms one being liquidating your business overtime where you keep on paying yourself until the funds are finished thereby closing the shop. The major benefit of this is that you will get a paycheck to still maintain your lifestyle. The downside to this method of the exit strategy is that your investors will be left unhappy and the growth of the business will suffer overtime reducing its value. The second form of liquidating and close the business is to close the business immediately and sell off the assets as soon as possible. The money you will receive will come from the inventory, equipment, and property owned by the business. If faced with any debts prior, the money from the assets sells will initially be used to clear them first before you receive a penny of it. The ideal exit strategy to select will be the one that meets your goals and needs. Selecting one will require that you consider the following key points.
Make sure the finances are prepared properly. All the personal and professional finances ought to be declared before a transaction is even made. Then One should consider their options. Ensure to have several exit strategies to help you determine the best one.
One should also speak with their investors and shareholders. Make your investors aware of your intentions to exit the business but also still show them how they could still be earning with your exit. It also helps to choose a new leader for the organization. Begin shifting your responsibilities to the new leadership of the organization to finalize your plans.
It is also wise to make your employees aware of your desire to leave the company and this should be done after finding the successor in terms of leadership. Your customers should be the last group informed about your exit plan. Give your customers alternative solutions and the go-ahead to introduce them to new owners.