Exit Strategies: Why Should YOU Have One?
What is an Exit Strategy?
Do Exit Strategies Matter?
Do YOU Need an Exit Strategy?
Exit strategies have become a hot topic again! I suspect it’s because of shows similar to Shark Tank and all the Angel Investor and Fast Pitch Competitions occurring. Instead of the traditional manner of financing, we have found more creative ways to acquire finances to secure business operations. Exit strategies are trending because the once terribly neglected Business Plan has become chic again, as we invite potential investors to review our businesses. So I say, “If it’s hot, let’s grab a surfboard and ride the wave!”
Exit Strategies: Defined
Oversimplified, exit strategies are the plan for a business to close, be sold, or for a key Business Leader to leave the business (usually with a nice package). Exit strategies are typically included in YOUR Business’s Business Plan. I know it seems odd to have an escape route planned while you are trying to launch a business as you begin to build your business, but this is an exercise in planning. Brilliant Businesses, as we have discussed usually have a Plan A and Plan B for everything.
Exit Strategies: Do They Matter?
Yes. Exit strategies do matter. Imagine this: someone walked up to you today and said, “I’d like to buy your business for cash tomorrow, please have everything ready for a meeting with me tomorrow.” Would you be able to deliver YOUR Business’s:
- Year to Date Profit and Loss Statement
- Year to Date Balance Sheet
- Book of Business/Sales
- Business Entity Documentation
- Living Business Plan
- Internal Operations Systems Manual
- Determine YOUR Business Acceptable Selling Price
***Remember, exit strategies should also include enough finances to support you as you resign from your business!
As always, the blog uses oversimplification as a tool to assist a variety of Business Leaders. Please do not consider the above list as complete. Every type of business, individual state laws, even potential buyers require different documentation. Yet, I wanted to reveal the basics you should have prepared. Having the above list completed will catapult you into leading a functioning business. Of course, your revenue dictates this as well!
I’m not sure if you’d like to walk away from YOUR Business or not. But, wouldn’t it be nice to have the option if it presented itself? Wouldn’t it be nice to know that YOUR Business has it’s structure and systems functioning and all your organizational documentation is completed? Wouldn’t it be nice to have a Business Plan to reference and keep you on course?
Are Exit Strategies something YOU should have in place?
There are two schools of thought on exit strategies. The first is what I shared above- always be preparing and building your business to exit it. The second is to manage your business as if you will never sell it! Build it precisely how you want it to be and ride the wave!
There are benefits to both. There is no correct answer. Yet, there are some important steps you need to take to LEAD YOUR BUSINESS properly. If you haven’t completed a Business Plan or need to update yours for it to become a living Business Plan document, you may want to go to SCORE.org.
Over 2 years ago I posted a 3-Part Series on Business Plans:
Business Strategy: Business Plan (Part 1)
YOUR Business Plan isn’t a contract but it can and should guide you
Business Strategy: Business Plan (Part 2)
Is YOUR Business plan delivering or letting you down?
Business Strategy: Business Plan (Part 3)
Importance of converting YOUR dusty Business Plan into a Living Document
Business Movie Review regarding Exit Strategies
Mr. Magorium’s Wonder Emporium
This inspiring and lesson rich movie’s main plot is about an exit strategy of the Business Owner of the world’s most incredible magical toy store. A must see for all ages!
Please feel free to share any questions, comments, or tips regarding Exit Strategies …
THANKS FOR ALLOWING ME TO HELP YOU IMPROVE YOUR BUSINESS!
If you want to discuss this strategy or something you need assistance with,
please call Maggie (262) 716.7750 for YOUR No-cost Consultation.
p. s.: Exit Strategies are important… a Brilliant Business Leader would accept the challenge of the 7 points to begin preparing for exit and use it to strengthen your business. If you had this completed by the end of the year your confidence as a Business Leader would soar! Call if you have questions please.