Pain points of making an exit strategy
Pain points of making an exit strategy
By making a solid exit strategy business plan, you empower yourself to handle the challenges common to mature businesses. Even prosperous businesses encounter bumps along the way, often in the form of financial losses or dysfunctional business partnerships. Depending on your life circumstances, you may be tired of doing business due to health issues, retirement or other personal reasons. This is when the thought of leaving the business world altogether becomes an exhilarating light at the end of the tunnel. The nature of the challenges you’re facing will determine your exit strategy, as will your end goals in leaving or growing the business. If your company is thriving, you’ll be challenged to choose from the many options for expanding an already-successful business. If your business is on the fence or failing, you’ll face the seemingly life-or-death question of whether to revive it or let it die. Given all that could go wrong, you may feel overwhelmed creating an exit plan to minimize these risks. No matter what route you take, you’ll have to make some difficult decisions regarding your company’s future.
Know your options to create a solid exit plan
Know your options to create a solid exit plan
Before you begin working on an exit strategy business plan, identify what’s driving you. If you want to stay in business, ask yourself: Do you want to stay to make more money, or are you staying because you’re afraid to leave? If you want to leave, pinpoint why: Are you reacting to a bad business relationship, or are you making a reasoned decision? Honest answers to these questions will determine the exit strategy you choose.
The most common types of exit strategies include selling to a friendly buyer, paying yourself the maximum now with nothing left to sell upon closing or declaring insolvency. If your business is insolvent (unable to pay its debts), you’ll likely have to choose between liquidation (converting your assets to cash to pay off debts) and bankruptcy (making formal arrangements with your creditors to repay them, which could entail selling your company). If your business is on the fence, get to the bottom of why it’s failing before making your exit strategy business plan. Financial loss can be an opportunity for growth if you accept the challenge.
