No matter how attached you are to your business, the day will surely come when you will want to sell your investment.
An exit strategy is the planning for the process by which you cease to trade or hand your business to another entity. Whether you choose to liquidate your assets or make a sale, it is never too soon to start thinking about your own eventual exit strategy.
There are many reasons why people decide to sell their businesses and most of these are personal.
Business experts advise having an exit strategy in mind from the very first days of your fledgling business.
Selling your business is the most portentous and financially significant of all your business decisions, whether it's acquired by a Fortune 500 company, transferred to your children or sold to strangers.
If you know that you will want to sell for retirement, you could plan a friendly sale to an interested family member or friend, or to someone who you believe will steer the business in the direction you envisage.
It's a good idea to always treat your business as if you are planning to exit - this includes keeping your books tidy and always having a growth plan in place.
As already discussed, having a growth plan in place will help make your business an attractive prospect. It’s also one less thing you need to produce out of nowhere if you suddenly need to exit due to unforeseen circumstances.
If you always ensure your financial affairs, accounts and contracts are in good order, good planning will make it far easier for you to eventually realise the full value of your company, even when your exit from the business is unanticipated.
When things aren’t going to plan, it may be necessary to sell at a less than ideal time; when your company is in a period of decline.
If you receive an unsolicited offer, or difficult circumstances arise, a sensible exit strategy might be to sell as soon as you receive that sensible or realistic offer.