Why You Should Plan An Exit Strategy For Your Company

Why You Should Plan An Exit Strategy For Your Company

Selling the companies you start-up is one of the great advantages of being a professional entrepreneur. It can be quite a thrill to build a business from scratch?to grow it, expand it, and watch it take in high revenues and exceed its expected portion of market share. If you are one of the thousands of young talents who make a living by creating businesses, then you are familiar with this feeling. However, your work is not truly done, nor your success actually consummated until you make the sell. And knowing when to do so is an essential part of making the kind of money you expect to from the venture.

It is important that you have a clear, well-thought out, well-planned exit strategy for your company. A good exit strategy will increase your ultimate exit valuation and ease the transfer of ownership to the person or group buying the enterprise. It will also reduce the waiting time for selling your company, as it allows you to create intelligible criteria that, when met, gives you the green light to start the sell-off process.

Inc.com has an article that offers some sound advice on this matter. Here is an insight I found especially interesting:

Designing and executing the exit well can easily increase the entire value of the business by fifty percent, or more. Yes, designing and executing the exit well, can make half again as much money as all the hard work, and investment, that goes into every other business activity. That is why the exit is often the most lucrative of all business processes.

The rest of the article can be read here. No matter how many businesses you?ve established, developed, and sold, each one is special. Each one requires a great deal of time, energy, and dedication to make it successful.

When you think about all the work you put into building a business to a point where it is sustainable in its growth and profit, you don?t want to see it undervalued when it?s time to sell. Having a concrete exit strategy, that is modified and revised all the way up to the point of sell, can help you leave your start-up knowing that you got the right value and the right return for your investment.