If you own a small business, or you own shares in someone else’s small business, it is likely that you have at some point pondered how and when you will decide to sell up and move onto your next project. The exit strategy process can be approached in many different ways. Finding out which is the correct path for you can be difficult. This week, we will be talking about the best exit strategies are available.
What is an Exit Strategy?
An exit strategy is a plan you make when you wish to sell your ownership in a company to other investors, another company or perhaps relevant stakeholders. This applies if you are the owner of a business, or perhaps you simply own a number of shares in a company after making an investment.
The main idea of leaving a business is to make money, but there is a wide range of other benefits too. You will be given the freedom and flexibility to pursue other projects, or you will be rid of a conflict of interest with another investment, plus many more reasons an exit strategy can benefit you.
Types of Exit Strategies
There is a large variety of different potential business strategy templates, with the most suitable option depending on what the business is, how you are involved or the unique circumstances you face. Here are a few potential strategies to consider.
Exit Strategy for a Start-up Business
If you have received a lot of success from your small business start-up, you may wish to develop an exit strategy to make the most of your valuation. Perhaps you should think about approaching competitors who may wish to acquire your small business, technology or your customers. You may even find that you may have investors who would like to buy your out/ If you are looking to exit on account of financial issues, liquidation may give you the best chance to pay off debts and maximise the value of your assets.
Exit Strategies for a Small Business
If you own a small business, there are many exit strategy options available to you. You may wish to sell your business on the open market, for which you will have to determine the value of your business. You could also give your managers or employees the opportunity to buy the business if they are willing to take on the responsibilities that come with running a small business.
Small Family Business Exit Strategies
For a small family business, succession planning is imperative to ensure effective management as older members of the family leave the business. A main benefit of succession planning is that the business will stay in the family, which can help to make sure the key values of the company remain, and that the customers can stay connected to the business as it was before anyone left. You may even sell your shares onto your relatives or pass them on my restructuring.
Exit Strategy for Investors in a Small Business
If you have invested in a small business, and own a number of shares, you mat opt to sell these for a profit that reflects the growth of the small business. You may be able to sell your shares back to the owner of the small business. This will allow them to retain a larger portion of the business. Finally, you may wish to sell on to other investors who are able to support the business going forward.
Other Exit Strategy Examples
There are many other exit strategies that you can choose from, but it is best to speak to a professional in more detail about the best option. From liquidation to IPOs, there are plenty of tax efficient options for you.
Talk to Steven Glicher
Choosing your exit strategy and taking action can be a time-intensive process with many steps to take. It is always important to get professional advice before you make a final decision so that you know you are following laws and legislation, paying the correct tax and maximising your profits. Steven Glicher have a breadth of knowledge and experience to help you with your financial business decisions. Contact us today for more information.