How to plan an exit strategy

Posted By Jenny Chellew

How to Plan a Good Exit Strategy

Whatever stage or position your business might be in right now, planning a business exit strategy will always make sense. Having a clear path out, even if you have no intention of selling your business just yet, will guide you and keep you accountable as your business grows. Remember “a goal without a plan is just a wish”.

Exit strategy basics

If the idea of a business exit strategy is entirely new to you, don’t worry – it’s never too late to start.

You can begin designing your exit strategy by taking a moment to think about the conditions under which you would be prepared to say goodbye to your business.

Take some time to consider:

The ideal future for your business; what you intend to do with it and how and when you could reasonably exit?
What do you anticipate could happen to the business once someone else has acquired it?
What would you want the business to do or achieve once you no longer have it?
What money would you need from a sale to meet your future financial goals?

Solidifying the strategy

Once you’re clear about what conditions you would need to see in place before you action the sale of your business, it’s time to think a bit more deeply about how the process could and would work best for you.

Once you know your exit objectives, it can be useful to get some experienced advisors to help you work through some of the finer details and address any concerns. As you flesh out and add more detail to your exit strategy, it’s essential to understand your options. This will ensure you reduce as many risks as possible and are familiar with the implications of the approach you choose. If you would like some questions to ask about selecting the right lawyer for you click here.

Exit options

There are multiple ways that you can pass on, change or sell your business:

Pass it on to your children or other family members
Sell to another business – which is often an ideal outcome although it may take some time to find your perfect buyer
Merge with another business – this works well because you can set your price and know that your business lives on in some form
Sell to existing employees – who already understand and are familiar with your business
Sell part of the business to partners or investors – if you are not the sole owner of the business, this is an attractive option because it gives your business the biggest chance of survival
Sell as a public company – a strategy that isn’t easy to pull off (because the buyers drive the value), but which can prove lucrative
Liquidate – this is not the best option and should generally be avoided if possible

As a small to medium-sized business owner, thinking about the future when you’re busy dealing with the day-to-day isn’t easy.

Wise business owners are clear about exiting their business from the get-go and many have a plan in place from day one about how and when they will sell or pass on their business.

Our team at Better Business Brokers can help you work out a solid exit strategy and show you the right way to sell your business, so there are no nasty surprises when it’s time to wrap things up.

Better Business Brokers is located in the beautiful township of Bright and are specialists in buying and selling accommodation, tourism and country-based businesses across North East Victoria. We’ve had years of experience helping both companies and individuals sell their businesses and we look forward to helping you to.

Click here to request a confidential chat

Jenny Chellew is an accredited Business Broker who loves helping business owners realise their dreams.