Detail your most likely exit strategy: The exit is a process, not an event. How to Write an Exit Strategy by Jackie Lohrey - Updated September 26, Just as you had a plan for starting your business, you should also have a plan for closing or transferring ownership when you retire, die or become disabled.
Will you like to go public, sell it to another company, sell it to your employees or just liquidate it. Again it depends by industry.
Most of the time, business owners liquidate their assets because of huge debts. An agreement is struck with the investors, stockholders or lien holders establishing the value of the company. In the context of trading, exit strategies are extremely important in that they assist traders with overcoming emotion when trading.
So in the Executive Summary you will be mentioning how much money is needed by the business and what those funds will be allocated towards.
Does the owner make all critical strategic and operational decisions alone, or is there a strong management team in place? Feed It to the Chipper In the worst case, the company will be broken into pieces and fed to the liquidators as so much chum.
Outside investors want to collect their return. So just as you had a plan for starting your business, you should also have an exit strategy for transforming your business into cash, should in case you lose interest in the business or run into problems later.
But a lot of hard work is involved in making those numbers! You simply close the business and end it. You may have predetermined a level of profit at which you begin to market the company.
For instance, if your exit strategy is to go public, then show other companies in similar markets or positions that have successfully gone public in the last three to five years.
And you will be giving reports about the business to the board of directors and stakeholders. Discuss not only who they are and their current financial positions e. In the same vein, if the exit strategy you think is right for your business is to sell it off, you should make a list of potential buyers.
Assuming your startup takes off, you will probably find that the fun is gone by the time you reach 50 employees, or a few million in revenue.
If you would like to pass on your business to your children or any other family member, you should make sure that they have the prerequisite skills, are competent and have the success and future of the business at heart.In most cases, your written business plan should mention your personal exit strategy.
Sketching out how you plan to leave your business, harvest its value, and ensure its ongoing vitality under new ownership is an important first step in guiding the final chapter of your involvement to a positive conclusion. All good business planning documents have a clear business exit plan that outlines your most likely exit strategy from day one.
It may seem odd to develop a business exit plan this soon, to anticipate the day you'll leave your business, but potential investors will want to know your long-term plans. Nov 12, · An exit strategy is a method by which entrepreneurs and investors, especially those that have invested large sums of money in startup companies, transfer ownership of their business to a third party, or by which they recoup money invested in the business.
Common exit strategies include being acquired by another company, the sale of equity, or a management or employee buyout/5(7). An exit strategy is a contingency plan that is executed by an investor, trader, venture capitalist or business owner to liquidate a position in a financial asset or dispose of tangible business.
You see, it's not enough to build a business worth a fortune; you have to make sure you have an exit strategy, a way to get the money back out. For those of you who like to plan ahead--and for those of you who don't but should--here are the five primary exit strategies available to most entrepreneurs: The Modified Nike Maneuver: Just Take It.
Nov 12, · What is an exit strategy? An exit strategy is a method by which entrepreneurs and investors, especially those that have invested large sums of money in startup companies, transfer ownership of their business to a third party, or by which they recoup money invested in the business/5(7).Download