An exit strategy is a business owners plan for leaving the business. Having an exit strategy in place enables you to prepare for the future and gives you a direction that your business should move in. For example, if you are planning on a family member taking over your business, you should involve them in your business early on. Or if you are planning on selling your business and making a profit, there are steps you should take to increase the value of your business.
Even if you have no intention of leaving your business in the near future, it is important to consider your options early.
What to consider when creating a business exit strategy
When creating a business exit strategy, it is also important to consider if you will make a profit from your business, who will take over your business, how long your exit will take, if you want to remain involved in the business in some capacity or if there will be a transition period.
Having an exit plan enables you to structure your business to optimise your return from your planned exit.
Types of business exit strategies
The type of exit strategy you chose to adopt will depend on the type of company you own and your individual goals. Below are common types of exit strategies that you may want to consider.
- Sell to a Partner or Investor
- Family succession
- Management buyout
Do you want to continue to be involved in the business?
Some business owners continue in a consultancy role to help the new business owners after they sell. Deciding on what role you want to play will help you consider your next career option.
Plan for the future
At Four Wealth Management, we offer a small business financial planning service to help business owners with financial planning and increasing the value of their business.
If you are putting together a business plan or pitching to potential investors, you should have a clear exit strategy in place. You should also make sure that your financial reports are accurate and up to date to help maximise the valuation of your company.
For help creating your business plan or establishing your exit plan, contact a financial adviser at Four Wealth Management on 0117 973 0500.
Exit Strategies may include the referral to a service that is separate and distinct to those offered by St. James’s Place.