As you go through the day-to-day processes of managing your business, looking for a way out may be the furthest thought from your mind. Every entrepreneur worthy of the name is driven by a passion to succeed, and by a desire to take responsibility for their own future. When you succeed or fail by the strength of your own hard work, it can be a difficult decision to relinquish your tight grip of the reigns, and bow out of any enterprise.
But an intelligent exit plan is something which should be ingrained in both the business model and your individual career path if you truly aim to be prepared for every eventuality. An exit strategy can cover anything from the most destructive asset-stripping of a company, to a smooth transition to new ownership. Either way, it is something that should be in place from the earliest stages of your business.
So what do we mean by an exit strategy? From the most opportunistic cash-out, to a micromanaged change-over, the exit of one owner and the entrance of another will be a period of great change and potential instability for a company of any size. Your exit strategy will play a key role in deciding the future success of the enterprise you have built. So, what are your options, and best practices?
You already know to always plan ahead in business, and finding an exit route is no different. Evaluating your business is the first step to handing over the reins of your enterprise. Understanding its core strengths and areas of improvement is vital to knowing your business’s true value, both in the present market and in its potential for future development, as well as its brand strength and product range.
Selling up means that you relinquish complete control and contact with your enterprise. This can be a tough decision in itself, but may be ideal for an individual looking to retire, or start up a new project.
Every smart business leader knows not to simply settle for the first offer to match the asking price. Generate maximum interest both within the market and from external buyers. A bidding war will always make for a profitable exit strategy.
Executing the Transition
Do not change course. The business plan which you had in place before you made your decision to sell was the one which you had devised for stability and growth, so stick to it and do not change course. If you begin to make drastic changes to the business plan that is already in place, you may lose the confidence of colleagues and potential buyers, who may suspect that the alterations are being made to maximise the earnings you personally receive at your exit.
Moreover, when a business changes hands, it requires stability and certainty. Remaining steady and on course will allow new management to remain confident of your business's trajectory, and will alleviate any doubts that colleagues and employees may have during the transition period.
A successful exit strategy is as crucial to have in place as any other part of your operational model. If possible, you should begin to plan your exit two or three years before the event, so that you are able to remain flexible to short term changes in the market and the company. Weigh up the pros and cons of every offer that you receive, and market your enterprise to accentuate its achievements.
Stay honest and true to your work ethic as an entrepreneur, and you should ensure that your business retains its status and market share long after your successful departure.
This article was contributed by BusinessesForSale.com, the market-leading directory of business opportunities from online media group Dynamis.