The choice of exit plan can influence business development decisions.
What is your business exit strategy? If you are writing a business plan and you are yet to input your exit strategy, then you have not started. This article is going to help you write your business plan exit strategy. Unless you are a joker of a business owner, chances are you came up with a solid business plan at the start of your business.
I mean, you conducted your market analysis, and you developed strategies to plan and grow your business. If you really did all of that, then you are right on track. But one thing you are less likely to have done is planning an exit strategy for your business.
And you should do this as soonest as possible if you are yet to. Most people write plans on how to start a business but majority fail to write plans on how to exit their business. 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.
Some forms of exit strategies include, being acquired by another company, the sale of equity, a management-employee buyout et al Why Prepare an Exit Strategy? What happens to your business if eventually you die today or get involved in a ghastly accident that incapacitates you? The same holds true in business.
If your business plan is written to be used only internally, then a clearly outlined exit strategy could be used as a tool to help you decide on major expenditure choices and re-evaluate them according to your plans for the future. A business exit strategy is an entrepreneur's strategic plan to sell their ownership in a company to investors or another company. An exit strategy is a means of leaving one's current situation, either after a predetermined objective has been achieved, justifying premises or decision markers for any given operational planning changed substantially, or as a strategy to mitigate imminent or possible failure.
However, there is still a need to have an exit strategy in your business plan. There are two very real and practical reasons why you need to plan an exit: Outside investors want to collect their return.
Remember that equity investments are not like loans with interest. The investor sees no return until he cashes out, or the company is sold. Even three years is a long time to wait for any pay check.
Entrepreneurs love the art of the start. 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 are seeking for investment from venture capitalist VC or angel investors, then an exit strategy is a must have.
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. Without wasting time, here are the four commonest exit strategies you can choose from and incorporate in your business plan: Initial public offering IPO Taking your business public is a very expensive and time consuming exit strategy, as it usually attracts huge accountant and attorney fees.
But it can be very rewarding. Offering your business to the public has one simple implication: And you will be giving reports about the business to the board of directors and stakeholders. If you just cannot afford to let go of your business by selling itthen you can relinquish a portion of your shares by taking it public.
In that case, consider other exit strategies. For smaller companies that have already begun expanding—like restaurants that have franchised—an IPO may be a good way for the owner to recoup money spent, though it is worth noting that he or she may not be allowed to sell stock until the lock-up period has passed.
If this is your main exit strategy from the get go or you want to at least have the option of going public later, the easiest way to get listed is to seek investors that have done it before with other companies. They will know the ins and outs and can be able to better prepare you for the process.A business exit strategy is an entrepreneur's strategic plan to sell their ownership in a company to investors or another company.
The exit strategy is actually a plan to redeem the company from its original investors so they can realize their 10 lbs. of flesh for taking the risk in starting or growing your company.
Acquisition is one of the most common exit strategies: You find another business that wants to buy yours and sell, sell, sell. In an acquisition, you negotiate price. This is good. Writing a Business Plan – 6 Types of Exit Strategies You Can Consider and Choose From.
1. Initial public offering (IPO)Taking your business public is a very expensive and time consuming exit strategy, as it usually attracts huge accountant and attorney fees.
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 .
Part of the business planning process is the exit strategy -- bailing out of the business at some point before it dies. The exit strategy is actually .