Exit strategies and why you need one (or two)

A great num­ber of peo­ple start or buy a busi­ness, and only ever think about how to run it. The truth is, you should con­sider your exit strat­egy before you even enter a business.

Will you sell to a strate­gic buyer, or a owner-operator? Will you hand the busi­ness down to fam­ily, or take the com­pany pub­lic? What­ever you choose, the day to day oper­a­tions of your busi­ness are affected. For exam­ple, if you intend to sell to another buy already in your indus­try, to make your organ­i­sa­tion an attrac­tive pur­chase, you will min­imise admin­is­tra­tive func­tions. Tak­ing a com­pany pub­lic, you’ll focus on gov­er­nance and compliance.

With­out an exit strat­egy, your oper­a­tional plan­ning is some­what pointless…