You may love running your business now, but someday you will likely want to retire or move on. Learn about business exit planning right here and be prepared. With millions of businesses in operation across America, it stands to reason that a handful of them are run by people that eventually would like to retire or move onto another venture. When those people decide to throw in the towel, what happens to their businesses?
The answer to that question depends on the kind of business exit planning they do. If you’re unsure what business exit planning is or what it means to have an exit strategy, keep reading. In this post, our team walks you through exit strategy basics so you can start preparing today for your company’s future.
What Does It Mean To Have An Exit Strategy?
An exit strategy is a business owner’s means of leaving their company once they’re tired of managing it. Businesses should have some idea of what they’d like their exit strategy to be early on for the simple reason that most exist strategies require some front-end planning to execute.
Which means of business exit planning your company has access to will depend on your business’ unique traits such as possession of machinery, who your team is, and how your organization is run.
Which Exit Strategy Should You Plan For?
When you talk to a consultant about exit planning, they’ll introduce you to several options. Again, the one you chose will depend on you and your company’s traits and your preferences. The most popular exit strategies that small and medium-sized business owners opt for tend to be one of the following.
Liquidation is among the simplest business exit planning strategy options. All it entails is taking your company’s physical property (machinery, vehicles, owned buildings, etc.) and selling them. Once your assets are liquidated, you’ll close shop and will have successfully exited your venture.
Keep Your Company In Your Family
Another popular exit strategy is passing down your company to a family member. This strategy takes minimal work. All you have to do is work out a deal with somebody you know and appoint them the leader of your organization. In this model, an original business owner might still choose to collect an income and may even continue working in a consulting capacity.
Sell Your Business On The Open Or Closed Market
If liquidation doesn’t net you the payday you’d like and passing down your company isn’t something you’d consider, you may want to sell your business on the open or closed market. Closed market selling means offering your employees, friends, or family the chance to buy your organization. Doing this avoids having to go through the trouble of managing a transaction with strangers.
Open market selling entails putting out a wide call to investors to see if anyone would like to buy your business. Note that if you intend to sell your company on an open or closed market that most investors don’t like buying jobs.
That means they want to be able to purchase a company that’s already functioning, making money, and would require little to no hands-on day to day input from them. Creating those conditions is something that takes infrastructural investments.
Business Exit Planning Gives You A Life Beyond Work
Most 9 to 5 employees look to attain a life beyond work through cashing in their retirement. A Business owner’s chance at retiring is found through successfully parting with their organizations. We hope our advice to that end helps move you towards a successful uncoupling and a bright future! We welcome you to browse more of the business exit planning insight we have available on our blog!
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