How to Create An Exit Strategy?
“Look on every exit as being an entrance somewhere else.”
― Tom Stoppard, Rosencrantz, and Guildenstern
Many people find it outlandish if we tell them to plan their exit strategy as soon as they enter a new business. However, here we are going to provide a valuable piece of advice on how one can create an exit strategy for your business and why is it important!
The upcoming entrepreneurs are way smarter than many of their predecessors. Information advances have made them learn from the experiences of their exemplary seniors in the business. Therefore, they look ahead up to the mark of exit in the future as soon as they enter the first step in the business world. It lays the path very clear in their mind, and they can form common strategies to meet the end gracefully.
“If you want a happy ending, that depends of course, on where you stop your story.” Orson Welles.
Having an exit strategy in foresight is just like knowing what you aim for and how to reach there! You know what to plan for, and your goal lays in front of your sight- some may call it vision.
So, if you are a budding entrepreneur we are here to lead you to some ideas that will help you in creating great exit strategies for business:
Designate the control to a new CEO
It may be difficult to digest when we talk about handing over the reins of your dream business to someone else. However, yes, it has to be a part of your exit strategy!
At the inauguration of the firm, you have to control the business in every subdivision. Your inputs are needed to lay down the functioning and format of the company’s working ideologies. However, gradually you can think of bringing in a new CEO for the firm so that some of the control of the business can be given over to a person with new beliefs, ideas, and vision.
As a founder of the business, you can still keep your position intact among the board of directors. Bringing in a CEO has to be an introductory part of your exit strategy into the business. You need to decide the right time of appointing a new CEO only after your business reaches a stage of stability.
Highlight your competitive advantage
If you decide to sell your company over a period, there will be a lot of complicated processes involved. However, we suggest you plan when you are ready to take your hands off the business!
Selling the business has to be a tact bigger than selling a product. If you go on to tell people about your willingness of selling the firm- you will be on the left side of the negotiation. The buyers may have the upper hand over your desires. Instead, start highlighting the strengths and competitive edges of your business way before you intend to commence the selling process. Let the businesses learn of “their profitable avenues” by owning a company like yours! You will be approached by companies who would want to work with you- make a deal with a stiff upper hand. This strategy will help you to get the best negotiation abilities without letting the others know of your exit intentions.
Start listing the assets that you consider will be on hand at the time of closing of the business. Include physical and indefinable holdings into it such as goodwill, name rights of the company to the machinery, paper supplies, stationery, furniture. These days internet based assets are also on the top list of the business makers so count them in your list such as website rights, social media presence.
Having your list always on your tips will help you in handing over the business to the new buyer whenever the deal strikes right! If you are planning to close your business dry, then too you can start over by selling your assets before the closing day. Finding the right buyers with time in hand is the key to significant gains.
Many people enter into the business stream with great ideas. However, 80% of the companies fail in their initial years. Having a good idea is not the key to success. Having a plan to move ahead is the secret of reaching the bull’s eye. Devise your exit strategy and formulate your plans to arrive there- step by step taking advantage of every opportunity that comes across.