How to plan your business exit

Planning an exit strategy for your small business or startup

Business exit plans for company owners

Exiting your business at some point is inevitable. All business owners need an exit plan and it’s never too early to start preparing for removing yourself from the business or considering other ways out. For many entrepreneurs departure from their business means achieving the ultimate goal, business success and gaining the freedom back. Let’s discuss how to plan your way out. 

When to plan a business exit

Even if you’re not planning to exit your business yet, it’s a good practise to run your company the way it will be prepared for your exit in the future. That’s why you should start thinking about your exit plan before you need it.

How to plan an exit from your business

First, let’s take a look at the possible business exit scenarios. There are a few possible ways to exit your business.

What are the possible types of business exits?

Here are a few examples of business exit strategies. 

Business exit options:
  1. Merger
  2. Acquisition
  3. Selling
  4. Going public
  5. Liquidation
  6. Hiring a CEO to replace you

 

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Which exit strategy is the best

 

How to plan a business exit strategy

Developing an exit plan

Here are some insights to help you navigate planning your business exit strategy. 

Things to consider when developing a business exit plan

1. The numbers

Exiting or not, you need to know the key numbers showing that your business is a well-oiled machine. Those numbers include:

  • Total turnover
  • Operating profit
  • Revenue per customer
  • Margins
  • Number of customers you get every month

2. Business Processes

To be able to scale up and stay on top of the game you need a thorough description of all processes in your company. When you decide to exit, it will be much easier to proceed if you have the processes well described and ready. 

3. The business 5 – 10 years on

Where can your business go after the startup phase? Think  about the potential growth and how your company can look in the long run.

 

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4. Adding value

Do not stop investing in your business. Keep adding value to increase the future valuation and ensure the growth. 

5. The person you need to become

Your personal development is key to taking your business to a new place. Consider who you need to be at the time of your departure from the company.

6. Potential buyers

Research and understand your potential buyers. Find out what they perceive as valuable and what you can do to increase the valuation. 

 

Final notes

I hope this gives you some insight into preparing your way out of the business as an owner. 

If you want to share your thoughts, share with us in the comments. What is your exit goal? If you have exited a business in the past, what challenges did you have to deal with? 

Books about business exit strategies

The $100 Million Exit: Your Roadmap to the Ultimate Payday  
The Intelligent Exit: The Business Owner’s Guide To A Winning Strategy For Selling Your Business 
Smarter Business Exits: Strategies and Toolkits for Corporate Divorce, Succession Planning and Joint Exits 

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