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What is Your Exit Strategy?

Written by: Rob Keating

Article Overview: The day will come when you need to sell… What is your business exit strategy?

What is Your Exit Strategy?

Having a business exit strategy is an important aspect of any business plan. It is a natural component of being in business to have your focus on the more positive aspects of running and developing your business but it is important to be prepared well in advance for your inevitable exit. Whether the exit time is planned, for example through retirement, or the unexpected, such as through illness, it is important to be prepared.

Obviously, it is better to plan for this eventuality sooner rather than later - that way you can be sure you control the process and not the process control you. Clearly defining your objectives, having a plan and giving full consideration to all possible options, will place you in a much stronger position than the ambulance at the bottom of the cliff scenario. A successful exit strategy ensures you get to manage the process to provide the outcome you want, while maximising your return.

One way of ensuring your best return on the eventual sale is to always ensure it is in good saleable shape. Keep in mind that the exit strategy needs to be flexible, as circumstances can change. Develop, establish and formalise efficient, workable business systems so that your business does not depend solely on you and your knowledge. Train and empower key employees, that way a potential buyer can be confident they can step in and run the business successfully in your absence.

One common element in any successful business sale is a healthy cashflow, ensure this is there when it comes time to exit your business. Also maintaining good financial records that demonstrate a strong or growing business will go a long way to attracting a quality buyer and maximise your return. When a business needs to be sold quickly as in an unforeseen or unplanned exit, the owner often has difficulty realising the full market value of the sale. Proper planning can help ensure that even quick sales produce good results.

Whatever your business exit strategy, try and pinpoint the needs particular to you and your business. A successful exit strategy is the one that works best for you and provides you with the best possible outcome. For more information on building the value into your business or listing your business for sale, visit www.nzbizbuysell.co.nz.

Information provided by www.nzbizbuysell.co.nz.

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