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Entrepreneurs should always start their company with several long-term goals for success.
If you’re selling to another buyer, then can you work something into a contract that ensures your most loyal employees still have a job?
If you’re merging with another company, how can you make sure that the mergers you choose are moving your team towards the goals they wanted to achieve when they first joined your business?
This can be problematic when the aforementioned unforeseen circumstances occur.
To optimize an exit strategy, business owners need to think through their personal and corporate goals and create a plan that includes the following essential components: 1. One of the most important components of any exit strategy is a clear description of what business owners hope to achieve (for themselves, their heirs and their businesses) when they extricate themselves from their companies.
Ultimately, implementing an exit plan means thinking about what the actual “best result” would be for your company.
Where do you want to be before you feel ready to sell, merge with a different business, or start something new?As with any business goal, owners need to define their goals before they can determine the best strategy.Once goals are clearly defined, business owners and supporting players can work together to develop a strategy that will reach the desired goals and position the company for future growth. To secure the best price and/or deal terms for a company, the exit strategy should include tactics that optimize company value.However, as time goes by, and you discover new opportunities in your life, you may decide that it’s time to think about your future, and what you’re going to do when you’re finished running the business you have now. Even if you have no plans on shutting down any time soon, you might want to switch into a different industry or idea. An exit strategy is just another component of your business plan and something that sets you up for long-term growth.Without the detail you need from your exit strategy to guide your business in the right direction, the chances are that you’ll end up working harder, not smarter.Are you happy to stay on and help the company continue to thrive after you’re no longer leading the way?Or do you want to cut ties entirely with a significant cash settlement?An exit plan not only helps you to think about the best route forward for you, but for the other people involved in the growth of your organization too.A pricing plan and a good strategy for getting business capital aren’t the only parts of your business plan that are designed to set you up for long-term financial success. Whether you’re selling the company or merging it with another brand and accessing ongoing compensation as a board member, it’s important to know how you’re going to protect your finances going forward.The most common exit strategies involve ensuring that you get the most value possible out of your business, options to consider include: As mentioned above, an exit strategy is just another plan in your business.With your exit strategy, you can outline your road map to success, complete with ideas of what you want your business model to look like five, ten and twenty years from now.