There are a whole number of different reasons why a business owner might decide it’s time to move on. Whether you’ve decided it’s time to retire or you just want to get going with your next venture, you need to make sure that you have a well-thought-out exit strategy. From ensuring that you maximise your ROI to leaving the business in the right hands, here are three important reasons why a business exit strategy is a must-have.
1. Optimising your ROI
No matter why you’ve decided to exit your business, you’ll want to ensure that you maximise your return on investment. Most people’s businesses will be their most significant life investment, both in terms of time and money. It might be time to leave that behind, but you’ll want to make sure that it’s valued properly in the sale or handover.
Employing the services of an experienced business broker such as Dexterity Partners can be essential for this. They’ll make sure that your business is marketed in the correct manner, exposing it to potential buyers through their extensive network. This is an essential part of your existing strategy, something that definitely shouldn’t be overlooked.
2. Risk management
When exiting your business, you need to make sure that you have a comprehensive risk management strategy in place. In recent years particularly, many business markets have been highly volatile, meaning that new risks can emerge surprisingly quickly.
You need to make sure that your business is able to respond to these risks as and when they emerge; the exit process could take quite a while, and you don’t want anything to happen that could negatively affect the value of what you’ve created.
Potential buyers will also want to know how you’ve gone about protecting the business from potential threats, and about how you’ve built strength and adaptability into the business’s architecture. These aren’t easy processes to enact, but they’re often what differentiates a successful, long-standing business from a fragile startup.
3. Legacy
In many cases, businesses are more than ‘just’ a financial investment. If you’ve put your life’s energy into creating something, you’ll want to make sure that it ends up in the right hands, and that the new owners will be able to continue its legacy.
If this is particularly important to you, it needs to be factored into your exit strategy. It might influence how you choose to look for a new buyer, or dictate the contracts that you draw up to manage the sale.
There’s a lot more that goes into exiting a business besides this, and you’ll need to carefully consider what you want out of the exit when planning your strategy. It’s important to get outside help in some cases, from third parties such as accountants, lawyers, and business brokers. By taking these steps based on your goals and values, you can ensure that you get what you want out of the exit, while also making sure that you leave the business in good hands.
