Starting a business is not a simple task. It’s quite challenging to keep track of everything else making sure that every single component related to the business is covered. This is why most if not all business owners create a proper layout for a comprehensive plan to keep everybody that is affiliated with the business on track. Especially managers and supervisors. Planning out ahead of time is crucial and is generally a good practice to prevent wasting valuable time and resources on ventures that might not succeed. Yes, a comprehensive business plan is important, but just as you are planning for your startup business or venture, it is also crucial to establish an easy way out should the circumstances become unbearable for your business, or when you have come to your terms and would want to move on to other business ventures. Exit strategies are just as important as preparing to dive into a new project.
A business exit strategy is a strategic plan to sell their ownership of the business or company to investors or other prospective buyers. The exit strategy gives a business a way to reduce their stakes in a business and make a substantial profit as a culmination for the business. If the circumstances become unbearable for your business and things start to get bad, a well established exit strategy business plan allows the business owner to limit their losses. Ideally, an exit strategy is developed alongside the initial business plan before actually starting the business. It is widely important to to establish one early on as an exit strategy can greatly influence decisions in business development.
Exit strategies vary depending on the choice of the current business owner like how much control or involvement they want to retain in the business, whether they want the company to be developed and run the same way after the departure of the original owner, or whether they are willing to see it shift significantly in terms of general development and management, provided that they are willing to be paid well to sign-off all business properties. To properly get acquainted with the document and how it works, check out these exit strategy business plan samples that we have listed right below. After getting familiar with what the document is and what it looks like, you can then use these samples as a guide or even as templates for when you want to establish your own exit strategy business plan.
3+ Exit Strategy Business Plan Samples
1. Exit Strategy Business Plan Sample
2. Exit Strategy Business and Strategic Plan
3. Exit Strategy Business Plan Format
4. Standard Exit Strategy Business Plan
What Is an Exit Strategy Business Plan?
An exit strategy business plan is the business owner’s plan to sell and transfer their ownership of a business to prospective investors or other companies. Exit strategies give business owners a good way to reduce of liquidate the stakes in a business and make a substantial profit. Exit plans are necessary to secure the business owner’s financial future. Common types of exit strategies include IPOs (Initial Public Offerings), strategic acquisitions, and management buyouts.
Which of these strategies the business owner chooses depends on a slew of factors such as how much involvement they want to retain after transferring ownership, whether they want it to be run the same way, or whether they are willing to see the management and operations shift. Like how a strategic acquisition will relieve the original founder of their ownership and overall control. IPOs are usually the most beneficial of all exit strategies since they often bring along the highest payoff and most prestige. And of course, bankruptcy is the worst way to exit a business. A key aspect of an exit strategy is proper business valuation. There are specialists that can help business owners determine a fair value of the company’s financials.
How to Create an Exit Strategy Business Plan
The best type of an exit strategy largely depends on the type of business and the size of its operations. Medical companies might be selling to one of the other partners in the same industry. Or a sole entrepreneurs ideal exit strategy might simply be just to make as much profit as possible in its last breath, then close down the business. To be able to properly plan an exit strategy for your company, consider the following steps below.
- Prepare your finances
The first steps you’ll have to take to develop an exit plan is to prepare an accurate account of all your finances, professionally and personally.
- Consider your options
After you have a clear picture of your finances, consider the exit strategies that you might take, determine your best option. From IPOs to strategic acquisition.
- Speak with your prospective investors
Approach your company’s investors and stakeholders to establish a proper intent to exit the business. Construct a strategy that informs your investors and stakeholders on how they will be compensated.
- Choose new leadership
Once you’ve fully decided to exit your business and have set up an exit strategy, begin transferring your leadership to your new appointed or chosen leader to further finalize your plans.
- Inform your employees
After all preparations, be sure to share the news with your employees. Inform them of the transfer and be prepared to answer their questions if there are any.
- Inform your customers
And lastly, tell your clients and employees. Introduce them to the new owner and if you are shutting down your operations for good, provide them with alternate options.
What are the 5 exit strategies?
- Sell to someone you know
- Initial Public Offering
What is an example of an exit strategy?
Examples of some of the most common exit strategy for investors include increasing your personal salary and pay bonuses to yourself in the years before actually exiting your company.
What are exit options?
Exit options are stipulations within a business plan or project that allows the company to discontinue the plan with limited financial consequences.
You should always include thinking through you exit strategy if you’re putting together a business plan or if you’re preparing to pitch a project for the first time. You should be ready to let go of your business, even before it has been properly established so to speak.
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