Business exit planning is an essential part of running your business. Are you prepared in the event that you have to sell or close your business? How do you know when to stop? And what measures should you take when you finally decide to sell? All these questions and many more will be answered below, as we explore what a working business exit strategy should look like.
Why Your Exit Strategy Matters
Your exit strategy is important for 3 main reasons: it will allow you a chance to bow out gracefully, it can give you the opportunity to start a new (different) business, and it will also give you the tools and opportunity to greatly increase your capital.
Exit strategies are not just about quitting your business and retiring, although that is also an option if you choose to do that. They’re also not necessarily about avoiding debts and bankruptcy, even if they can help with all that too. In most cases, however, if used successfully, a business exit strategy will assist you in having an easier time starting new ventures, increasing your income and making sure that you avoid any financial and legal issues after getting rid of a business that you simply don’t want to deal with anymore.
Should You Sell Your Business?
This is a question that many business owners who have reached a certain age or who don’t feel like they can continue running a business are wondering. The idea is that you have to be honest with yourself and see if you can actually manage and lead your business properly, while also keeping an eye on your revenue and checking to see if your employees, clients and partners are all satisfied with your company’s performance.
Sometimes the decision to sell is of a personal nature. You might have already made a lot of money and you’re considering the option of retirement. Or maybe you want to switch to running a smaller business that will be less demanding and allow you to have enough time for your family.
Stagnant financial performance and the fact that your business hasn’t grown much in the past few years could also be a good reason to enact your exit strategy. Also, personal dissatisfaction with the way the business is going and the turn it had to take towards avenues and niches that you really don’t prefer might make you want to start fresh and sell the old business to someone who might prefer to go down that path.
The Importance of Hiring an Experienced Business Broker
Business exit planning management companies will tell you to expect a lot of challenges while planning and enacting your business exit strategy. You’ll have to calculate how much your business is worth on the current market, decide how much to ask for it, and find clients to sell it to. You might also need to prepare your business for the sale and continue running it as usual while trying to gain a higher profit.
All of this will be very hard to do without help from a professional and experienced business broker. A local business broker will help make the process of promoting and selling your business easier, while helping you avoid any legal issues, prepare your documents and free up a lot of your time for important tasks relating to your business exit strategy that only you can take care of.