Every business owner has an inevitable day when they will no longer own their business. Ben Franklin wrote “Nothing is certain but death and taxes,” and he was right.
Baron Rothschild, when asked how he became rich, “I always sell too soon.” By that he meant he never waited to get out of a business at the very top price. He sold while the price was still rising and by doing so minimized the chances of losing money on any of his investments and businesses.
By planning your exit from your business, you can leave at the best time for you, your family and your investors.
What is an exit from a business?
It can be as emotionally violent as a bankruptcy or be a quiet closing with all debts paid. You may get an offer that you can’t refuse and be set up for life or your next business. You can plan to sell at a good time: take the money and run. It can also be passed on to your heirs. An exit strategy means simply that you have planned that transition and you are ready to take advantage of good opportunities.
What’s your business worth?
What do you want it to be worth? How do you recognize when it’s time to leave? Your business plan is the blueprint to get you to that level and your exit strategy guides you on when to cash out.
It takes a lot of time and dedication to build a business that will be profitable, even more if you want it to grow very, very quickly. Although it is possible for people to sustain 80 – 90 hour weeks for a couple of years, most people function at their very best with no more than 55 – 60 hours a week at work. Beyond that, they start spinning their wheels and are not as productive as they should be. Once you’ve built your business to a certain point – and that will vary from business owner to business owner, consider making changes that will allow you to sustain growth without dedicating every hour, waking or sleeping, to your company.
One of those changes will be to start delegating a lot of your operations to someone else. This is good for you, because it will give you the opportunity to focus on your business strategy, your management team, your customers and the “big picture.” It is also will help you to position the company so that you can take advantage of any opportunities that may occur and prepare to stimulate opportunities as well.
Read on to see what are the typical exits for business owners