06 26 2015

Exit Strategy for Business Owners

06 26 2015

5 Tips For Planning A Successful Exit Strategy

No matter what your small business financing situation might look like, you should be aware of your long-term options. After working all your life to grow your business, you should ensure that you’ve established the necessary exit plan to protect the company. While most people plan for years to get their small business off the ground, most owners fail to draft an exit strategy. Whether you want to make the transition on your own terms or whether an unexpected turn of events leaves you unable to continue overseeing the day-to-day operations, you need to prepare the business to continue functioning after your eventual departure.

Even though 76 percent of business owners plan on exiting from their companies within the next 10 years, 83 percent either do not have a transition plan or have failed to articulate their plan to the appropriate individuals, according to the 2013 Northeast Ohio Chapter of the Exit Planning Institute. With a myriad of options available, it makes sense that owners are overwhelmed by the choices. From selling to a private equity group or establishing an Employee Stock Option Plan, you need to make a choice that determines your company’s future.

No matter which exit strategy you wish to pursue, here are five tips to help ensure you stay focused during the business-selling process:

  1. Don’t stop selling
    Even though the sales process will consume large portions of your time and resources, you still need to focus on continuing the day-to-day operations. Don’t get sucked into the whirl of distractions. This includes checking out early before the deal has been finalized. Some transactions can take a significant amount of time to complete, while still others never get finished. Be sure you stay focused on the business until you are sure all ownership responsibilities have been transferred.
  1. Communicate your plan
    Nothing messes up the cogs in the operation faster than miscommunication. This can lead to redundant activity, unfinished tasks and total disarray. Clearly communicate your plan to all management and the necessary staff members. Keeping everyone on the same page helps ensure the exit plan is successful. But be careful about who you tell since you don’t want word of the sale to get out ahead of your own announcement. Competitors can easily use the leaked knowledge of an ownership shuffle to spread distrust in consumers’ minds.
  1. Assemble the best team
    No matter how much control you like to maintain over your affairs, selling a business is a complex endeavor with significant variables, all of which can drastically alter the outcome of the sale. While you might know your business and your industry, you will still need to enlist the assistance of financial and legal professionals. Do your research to ascertain the best team possible for you and your business.
  1. Focus on your value
    While you should always hire an outside firm to perform a business valuation, be sure to heed their advice. You should try to avoid comparing this acquisition to other sales, since all companies and buyers are drastically different, with unique circumstances surrounding every deal. If you try holding out for more money because someone else received a higher offer for their company, you can end up missing a potentially lucrative deal.
  1. Know your triggers
    Like a wounded yet determined boxer struggling to stay on his feet, you need to know the right time to call it quits. In your case, throwing in the towel isn’t an admission of defeat, rather it’s an opportunity to start another phase of your life. Establish triggers for when and why you plan on exiting the business, either once you’ve reached certain goals or passed specific milestones.


  • Get your brand on mobile devices

    3 Ways to Get Your Brand On Customers Mobile Devices

    Everywhere you look, you're bound to see someone scrolling through newsfeeds, messages or even news articles on their mobile devices. Smartphones are no longer considered so much a luxury as they are a necessity. In the U.S., 72 percent of the population reports owning a smartphone, according to a survey conducted by the Pew Research… […]

  • Future proof your business

    How to Future-Proof Your Business

    After the holiday rush, it's still important for businesses to continue innovating. To maintain longevity and keep an edge over their competitors, managers need to constantly think of ways to future-proof their companies. Although it can be difficult to know what exactly is coming next, a brand can take a few steps to ensure that a company's]… […]

  • Earth day benefits for small businesses

    How Can Small Businesses Benefit From Earth Day?

    Earth Day falls each year on April 22. This celebration of the planet focuses on protecting the environment and being conscious of decisions that impact local and global ecosystems. The holiday can have an equal focus on the actions of individuals and businesses, so there's no reason your company can't take part in Earth Day… […]

  • Small business marketing guide

    Small Business Marketing Guide – Improve Your Marketing Program

    Take advantage of the power of marketing by downloading National Funding's Small Business Marketing Tips eBook. A solid small business marketing strategy helps ensure that owners in any industry can potentially turn a minor investment into major sales opportunities. Unfortunately, too often, many small business owners mistakenly think they don't have the resources or tools… […]