Exit Strategy: How to Choose Yours

Choosing an exit strategy is about making the right decision for your financial future, make it a part of your business plan.
Latest posts by Chris Finch (see all)

Startup Proposals: Choosing Your Exit Strategy

Your startup proposal will probably be the most important document you ever put together. During this crucial development phase, it can be easy to become preoccupied with the beginnings of things and lose a sense of the end goal – but including an exit strategy in your initial proposal guarantees long-term financial security and peace of mind.

The buzz of taking your first step as a startup can make it difficult to keep an eye on your financial future – and that’s exactly why the exit strategy is so important. Working this into your initial proposal not only indicates that your startup is viable in the long-term, but also that you’ve prepared for every eventuality.

If you need help planning your business exit strategy, it’s simpler than you might think. It’s all about choosing the route that’s right for your business – and we’ve laid out your options right here.

Option 1: Selling

An understandably common exit strategy is simply to sell up, offering you a fresh start and a lump sum to use for future endeavors or retirement. There a variety of options here, such as selling to an investor, team member or other enterprise – and each offer their own unique advantages, depending on your ultimate aims. What’s essential to remember, however, is that your business should be a desirable purchase for any buyer – with or without you in it. Demonstrating to potential buyers that your company is self-sustaining and proven to be profitable will help you extract as much value as possible from the business – and can also be incredibly tax effective if you’re eligible for Entrepreneur’s Relief.

Option 2: Succession

One popular exit strategy is to name a successor for your business – for example, a family member. That way, you can keep your company’s value in the family, which is a massive factor for many business owners. A point worth considering, though, is the issue of mixing business with personal matters – especially as you’ll need to choose a successor who shares your professional acumen and passion for the business itself. But if your retirement income depends on your business continuing to be profitable, you’ll need a plan B in the event that this doesn’t pan out as planned.

Option 3: Closing

There’s a stigma attached to closing a business, which can deter many entrepreneurs from considering this exit strategy. In actual fact, opting to close can actually be a perfectly logical route – especially if your professional skill set and contacts have driven the success of your business, meaning it would be unsustainable without your involvement. The ins and outs of closing down become more complex depending on the size of your team and your company’s legal structure, which is why independent financial advisors can be an essential resource when planning your professional exit.

The key thing to remember is that no two businesses are the same and choosing an exit strategy is about making the right decision for your financial future. By considering the options available and making a choice that is both sensible and sustainable, you can ensure a gratifying end for your business and a comfortable retirement for yourself.

Previous Article
market research

Cheese Cake Delite: A "Tastefully" Done Entrepreneurial Endeavor

Next Article

3 Simple Steps to Get "Unstuck" and Move Past "Overwhelmed"

Related Posts
virtual assistant
Read More

How Virtual Assistants Can Benefit Startup Leaders

According to venture capitalist Bill Trenchard of First Round Capital, the average startup founder "works about 300 days a year, 14 hours a day." He should know. Trenchard cofounded and led three companies and, as a VC, advises hundreds of startups. "Looking at the schedule of a typical CEO, a full 70 percent of that...
succession planning
Read More

Your Business Legacy: Why Succession Planning Is a Crucial Step in Estate Planning

Running your own business is a mammoth task and a considerable investment. Statistics have consistently shown that small business owners have to work longer and harder than the average employee. So, after dedicating so much time and energy to building up a company, it’s crucial to protect it should the worst happen. Almost all of...
supply chain
Read More

How to Keep Vendors and Clients Happy During Supply Chain Hiccups

Supply chain breakdowns are happening due to global disruptions, rising costs and increased consumer expectations. Businesses can't always stop supply chain hiccups, but they can learn from them and limit their impact on vendors and clients. How a business responds to a supply chain issue can have far-flung effects. A company that is proactive and...
Read More

How to Support Employee Mental Health and Avoid Startup Burnout

When it comes to finding the right job — and staying there — candidates are looking for a lot, especially in a virtual setting. Gone are the days where foosball tables and free snacks constituted benefits. Of course, we still love them, but there has to be more that matters. People are primarily looking to...