Attract investors and prepare for your company's future by planning an exit strategyWhen you're starting a business, planning an exit strategy deserves the same consideration as researching potential funding sources and identifying your target market. It's so important that it's often recommended you include your exit strategy in your initial business plan, because investors commit to any significant financial contribution, they'll want to know what kind of return they'll receive and how they can exit the project, and what your long-term plans for the business are.
As you plan your exit strategy, you should take all possible options into consider so you can find the best fit for your business. Options for exiting the business include:
- Selling the company
- Merging with another company
- Passing the company down to a family member
- Franchising as an exit strategy
Create your exit plan early -- and include it in your business plan
Hire an expert to help you with your exit strategy planTo ensure a seamless transition, hire a consultant to help you create and implement your exit strategy. They can guide you through the process, simplify it, and alert you to any issues you need to consider.
Outline family succession as part of your exit strategy planMany business owners enlist a trusted family member to take over the business when they retire, but while this may seem like the simplest solution, it has its own challenges. For example, you may offend other relatives who aren't given control, or employees may resent a family member stepping in and taking over. To minimize the risk of family squabbles or a difficult transition, determine your succession plans at the outset, and make sure everyone in the company--especially your designated successor--understands what this means for them.
- One of the most popular strategies for exiting the business is going public, but it's also one of the most difficult to accomplish. While the option may sound exciting, it may be more practical to hand over control to a trusted employee or relative, or merge with another company.
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