A business exit strategy is a business owner’s strategic plan to sell the business to investors or another company. Whatever the business owner’s motivation to sell the enterprise, the exit strategy needs to include specific steps and processes – here are some identified by Mergers and Acquisitions experts, iKadre:
- This step’s valuation is essential for determining the amount of money that will change hands when the merger or acquisition transaction is complete. The valuation process should take an inventory of the company’s tangible or intangible assets, of everything the value of which can be translated into money, including the debts and the liabilities of the business that will need to be subtracted from the value of the assets;
- Setting a realistic price – the emotional value of having built a lucrative business is rarely monetizable. Therefore the final cost of the business needs to be set realistically, based on the company’s objective valuation and the correlation of that value to the actual market possibilities;
- Finding the right buyers – ideally, there should be more than one bidder on the business. That is the optimal way to obtain the best price for the company;
- Allowing sufficient time – developing an exit strategy and completing the transaction takes time and should not be rushed.