Common types of exit strategies include initial public offerings IPOstrategic acquisitions and management buyouts MBO. Go Public The most complex exit strategy is jumping into the morass of regulations managed by the Securities and Exchange Commission.
Getting out of business may mean selling it. The key characteristics are certainty that such an event may take place but uncertain timing. Selling ownership through a strategic acquisition, for example, can offer the greatest amount of liquidity in the shortest time frame, depending on how the acquisition is structured.
Planned Voluntary Exit A typical example of a planned, voluntary exit would be a Business planning exit strategy movie setting a date for his retirement.
This scenario assumes a well-performing company that is generating positive cash flow and profits. New ventures will require money, as will taking time off to attend to family affairs or personal goals.
An award-winning photographer, he was also a contributing columnist to the "Antelope Valley Press. Decide if you would prefer a lump sum or a series of payments, and what you would do with it.
Planning allows you to control different aspects of your business and the more you plan, the more you are in control. This option often results in dismissal of most management in the target company and some consolidation in the ranks.
He may also wish to change certain aspects of the company, in which case the strategic plan must foresee such changes. If the company foresees the exit, the company must plan for it. The consultant will also educate the owners as they progress through the various phases of the planning.
These private-equity groups can custom design a solution for the right-sized business with the right growth story. In either case, the exit strategy influences strategic planning.
A strategic acquisition, for example, will relieve the founder of his or her ownership responsibilities, but will also mean giving up control.
A planned exit strategy will help reduce owner dependency and perhaps further empower a management team that can either ascend to ownership, or help a new owner successfully continue to run the company into the future. Theoretically, owners can do this work on their own, however, it is likely that without experience in this area, they will make mistakes that cost much more than what they otherwise would have paid an adviser.
References 2 Securities and Exchange Commission: We offer a free customized readiness report for those who are thinking about selling. Exit strategies can mean the exit of an executive or owner from a company, but can also mean exit from a particular business segment.
Sell the Company This exit strategy is just as it seems. Pass my business on to my children.
Business Exit Strategy and Liquidity Different business exit strategies also offer business owners different levels of liquidity.
If you can sell your business then, do so. In addition, there is a rather significant psychological barrier to overcome as the thought of not being in a business is akin to a type of death for some owners — particularly after they have run their business for a number of decades. This process takes time and will impact a lot of people, so owners should put a lot of thought and analysis into it to gain clarity about what the right decision is.
My business ends when I stop working. These options include private sales, management buyouts, co-owner buyouts, an employee stock ownership plan ESOPand gifting the business to family members.
Slowly liquidate your assets — according to a preplanned schedule — to keep the income strong until the end but to keep you from being stuck with a lot of work once your business is over. Most owners understand the logic of planning for an exit, but typically put it off to some unknown point in the future.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 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. Planning your exit strategy is almost as important as running your company because it's the end goal.
If you go into a business without the end in mind, then you may be building your company for the undesired exit. Before we go into planning your exit strategy, what is an exit strategy? Feb 10, · Title: Exit Strategy () / Want to share IMDb's rating on your own site? Use the HTML below/10().
Without careful long-term planning, you may end up pulling out money now you'll need later. The Liquidation. Even lifestyle entrepreneurs can decide that enough is enough.
One often-overlooked exit strategy is simply to call it. Preparing for exiting the business. Real world business exit examples. Exit planning services. This article is intended for small business owners who may be considering an exit within the next years.
Although there are many variations, there are really only a few realistic exit strategies for most business owners. Most strategies only make sense. Exit strategies can mean the exit of an executive or owner from a company, but can also mean exit from a particular business segment.
In either case, the exit strategy influences strategic planning.Download