BizBen.com
500 New & Refreshed Posts, Postings Daily
Over 8,000 Postings & 2,500 Resources
Assisting Buyers & Sellers Over 25 Years!


Exit Strategy

Tags: selling a business

Comments & Replies: 1     Views:     Post ID:     Comments About This Glossary Term

Some business owners, when asked about their exit strategy, aren't sure how to answer because they don't know what that means. The question, if posed another way, asks: "What are you going to do with your business when you don't want to own it anymore?"



It's surprising how many business owners have not given this topic much thought. Yet they will have to confront it some day when they no longer have the interest or the energy needed to operate the company.



For some people who have not developed a strategy and then discover they are too ill to continue running a business, the only option might be to hold a going-out-of -business sale, then close the doors. Among the consequences of that scenario is that the owner probably will receive a fraction of the money the business might be worth as an ongoing concern purchased by a new owner. And if the premises or some of the equipment are being leased for operation of the business, the owner may find he or she continues to be responsible for those and other financial obligations, without the business income to cover those costs.



Many individuals who find themselves in this predicament might have avoided it by developing an exit strategy.



One beginning step in creating the strategy is to talk with professionals: a lawyer, accountant and one or more business intermediaries about the best way to prepare the company to be purchased and to find someone who wants to buy it. That means assembling the company's financial reports going back a few years to show to prospective purchasers, working with lessors to learn how (and whether) the leases can be transferred to a new owner, preparing a business plan to show prospective buyers how they can increase profitability, determining the right price and terms on which to make a sale, and deciding when might be the best time to implement the plan.



Whether the exit strategy is complex or simple depends on the type of business and the needs of the owner in post-sale years. More complex strategies, for example, might involve an ESOP (employee stock option program), an extended transition plan, or selling to a family member, friend or even a competitor.



Every business owner is advised to develop an exit strategy, even if it's years before it will be used.


Other Related Blog Posts, Articles, And Discussions You May Be Interested In

Buying A Business Losing Money Should I Buy A Small Business That is Losing Money? Brokers & Agents Discuss

When considering buying a business that is losing money one has to be very careful. There are reasons that the business could be losing money that aren't fatal or extremely difficult to fix and there are other reasons that should send you running in the other direction. ProIntermediaries discuss.
LA County Montrose Gift Store For Sale Montrose, LA County, CA Toy, Nostalgia, Clothing, Specialty Store For Sale

The most charming and historic shop in the lovely city of Montrose, LA County, CA. Well established business is at the epicenter of the Montrose Shopping District and Community. Specializing in children's boutique clothing, toys, gifts, and nostalgic items. Contact Peggy (Agent) at 626-290-2869 Cell
Why Many Deals Fail Why Many Deals Fail: Unrealistic High Asking Prices Are Usually The Culprit

The unfortunate truth is that approximately 50% of all small business sales transactions fall through. While failed transactions can happen for a variety of reasons, Peter Siegel, MBA (BizBen Founder & Lead Advisor) discusses the most common reason deals fall through; unrealistic asking prices.
8 Tasks To Help Sell Your Contractor Business 8 Tasks To Help Sell Your Construction Or Contractor Business: New Blog Post

Construction & contractor businesses can be difficult to sell. Licensing requirements, technical experience & owner reliance often create obstacles to getting a deal done. Here are 8 things potential sellers can do before putting your business on the market. Brian Loring explains in this blog post.
How Long Is A Standard Non-Compete Agreement? How Long Is A Standard Non-Compete Agreement Between Buyers And Sellers?

For those who don't know, a non-compete agreement is a contract between a buyer and seller of a business, which after the sale, prohibits the seller from engaging in direct competition with the business they previously sold. Joe Ranieri (Business Broker) adds this topic to a BizBen Discussion Post.
Ryan Clark Business Broker Southern California Ryan Clark, Business Broker: The Veld Group Brokerage - Southern California

The Veld Group provides a refreshing approach to Business Brokerage, Mergers & Acquisitions and Business Consulting and Valuations. From Your Street to Wall Street, we cater to Main Street Businesses as well as more complex Strategic Firms and Start-Ups. Phone Ryan, Business Broker at 310-652-8353.
Santa Clara County Sandwich Shop For Sale Santa Clara County, CA With High Annual Cash Flow Sandwich Shop For Sale

Mom and Pop sandwich shop for sale in Santa Clara County, CA. Proven year over year growth. Located in a business high traffic area with lots of easy Parking and located in a great retail sales area. Good books and records. Continued growth. For sale by owner. Walk in, online sales. High cash flow.
Great Questions To Ask A Seller As A Business Buyer What Questions Should I Ask The Owner, Seller Or Broker?

Asking the seller straightforward questions and getting straightforward answers in return is an important part of the buying and due diligence process. In this Discussion, both ProIntermediaries and Advisors offer thorough questions you should be asking during your meeting with a business seller.
Diane Boudreau-Tschetter Escrow Services Diane Boudreau-Tschetter: Escrow & Bulk Sale Services Throughout California

California Business Escrow, Inc. is a full service independent escrow company serving all of California and has expertise in a wide range of escrows. Our team prides itself on providing an exceptional escrow experience. For more info phone Diane Boudreau-Tschetter at 888-383-3331 or 209-838-1100.
8 Questions To Sellers 8 Questions You Most Likely Will Be Asked When Selling Your Small Business

When selling your small business, you'll be bombarded with questions - from the brilliant to the ridiculous. You need to be prepared. Here are some of the key questions you can expect to be asked. Tim Cunha (SF Bay Area Business Broker) reviews many of these possible questions from potential buyers.