Everything with beginning has an end. It’s so logical to strategize concept of starting up our own business and subject it to careful planning and implementation. We mostly stress about how much work we have to pour into the making and the lack of sleep thereof. But like relationships, we never see it coming or rather endings are not part of the picture.
Exit as a strategy
In business terms, exit strategy is a common word any founder should be familiar with. It takes part on the creation and finale of any venture out there. To make it clear, “exit strategy or selling” is the process of cashing out a business as a whole. It marks the final round of “harvest” or others refer to as liquidity event. The realization of actual money might be more or less the goal of most entrepreneurs.
For a small start-up, selling a business is equally proportional to growing it. That is because you must prove your value and enchant buyers all the way, convincing them that yours is worth taking. There are many ways to entertain the thought of exit. I can enumerate the following
reasons for selling your company:
Venture to another business
Assessing the market and withdrawal as a safety precaution
Because you want to live your dream of a hassle-free life
Whatever your reasons, know that exiting the business will require extensive planning. This would even take years before the actual exit happens and within those period, a lot can happen in between. So before you take into consideration all the possible ways of exiting the maze, make sure that you are entirely prepared for the consequences and compromises that may take place.
You can read this article first on:
Friendly tips if you’re already on the verge of selling :
1. Don’t forget to maintain due diligence of your records, properties (intellectual or whatnot)
2. Listen to recommendations & advises of your legal department
3. Read this article!
So, moving on I would like to introduce
6 ways as an Exit Plan for your business:
Transfer to heirs
– this is not fully considered as selling since you will be passing on legacy to your kin line. If your business matters on a personal and emotional level, inheritance will always be your first option . This cases are very common on closed-ties environment such as in Asia where family comes first. And passing the wealth only to designated family realms.
M&A (Merger / Acquisition)
–these two can be pursued separately. Merging will enable your employees to attain the same position that may or may not apply the same philosophy of management and compensation. Acquisition on the other hand has something to do with a 3rd party taking over your company entirely. On the plus side, this option is a high-payout-quicker-exit plan. On the flip side, acquisitions are offered by the 3rd party for shall we say, “getting rid of the competition “ altogether.
– or what we can call management buyout is the slow but sure process of transmitting the proprietorship to someone who you trust confidently. It could be a special friend or a dedicated employee who knows the business so well and more than willing to take on and continue the cause of your enterprise.
– or windup simply means you sell /liquidate all your assets to pay for debts and gain cash value. This can also be an option for many reasons like bankruptcy , moving to a different country or simply leaning to a different direction careerwise.
– many hopeful ventures plan to shell out their empires in the public market. Some view it as a prestige and for others a more desperate measure for development. If as a starter you are keen in drafting your success story and wishing all the way to be featured in the news as the next big millionaire, then IPO is a considerable idea. However, the truth is, it’s not for everyone. To be worth millions you have to put your heart and soul in your craft only to be disputed in the market by busy analysts subjecting you to judgment every step of the way. Ask yourself if you really want to be put in that position. Or if you’re capable given those conditions because the market is so unforgiving once you’re out in public. Probably, you’ll spend most of your time selling your company and not running it.
– what better way to keep? I don’t think people fully understand the concept of “less is more”. Private corporations have the luxury of full control and ownership without having to deal with too much burden and complications a public company entails. It’s very possible to nurture growth and maintain a well-balanced lifestyle if one is not too greedy for success or power.
Knowing how to sell is one thing and knowing WHEN to sell is another thing!
Timing plays a vital role in pivoting your way towards a better future. However you decide on these matters, always remember to choose the one that fits your personal agenda. Granting that your agenda is a goal of noble purpose.
The science of right timing is very important role in the process of selling.
There’s not so much of a question to sell a company than that of the worth it was sold for. Know…