Starting a business is a very consuming, tiring yet exhilarating experience. At this point, very few people often think of exiting and are often much more excited about the prospects of reaping the benefits. However, an exit strategy is very much a part of your business strategy and you need to take it seriously. It is the best way to secure your financial future while you still can.
So, how do you go about it?
Prepare your finances
The first step to planning your exit strategy is to prepare your finances. Have an accurate view of where you stand financially, both personally and in your business.
You need to have a sound assessment of your expenses, assets and liabilities, and business performance. These will be critical for you to have a fair valuation of your business in the event your exit strategy is to sell.
Weigh your options
Once you have your finances in order, consider the various ways you want to exit your business and determine the best course of action. To determine the best course, consider seeking help from a financial expert or a business lawyer.
If your business performance has not been great, then perhaps selling might not be appealing and you could look to maximize profits, liquidate and close down.
Speak with investors
If your business has external investors, approach them and share your intentions to exit the business. It is here that you will show your investors your business performances and give them advice on how they will get paid.
If you decide on selling the company or simply moving on completely from it, then start deferring some responsibilities to the new leadership.
This part will often be much easier for you if you have documented operations in practice which would make the transition less jarring and smoother.
Tell your customers and employees
Start by informing your employees of your plan months before you put your plans in motion. Be transparent and empathetic when you inform them of this decision. If you want to liquidate, ensure you have in place a mechanism to pay out their severance packages.
On the other side, inform your clients or customers. If you are planning on liquidating, give your customers or clients alternatives. If the business is transferring to new leadership, introduce them to your clients.
Ensure that you leave the business much more smoothly than you came in. That will be a sign of progress.
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