“Most entrepreneurs over time should start to think about a future exit strategy because preparing for an exit takes some time.”
– C.J. Fitzgerald, managing director of Summit Partners
There may come a time and place where exiting your company feels like the best move you can make for yourself and/or your company. Whether it’s due to strategic reasons, a change in environment, or simply a desire for new ventures, having a sound exit strategy can be paramount in maximizing you and your business’s future opportunities. Even if it may seem early, it is still necessary to plan some sort of exit strategy. Like any good business move, preparation is vital, and the more thorough you understand your options, the better equipped you and your business will be when the time comes.
As many know, strategy is vital in all areas of business. So, what are the strategies available for those planning an exit from their company? First, it’s necessary to clearly define your objectives in leaving your company. Do you still wish to maintain some element of control? Is this move purely to maximize profits? How do you wish to better the future of the company? These are the sorts of questions you should be asking yourself as you determine which exit strategy is best for your interests.
Once you understand your desired involvement, you can begin to go through the different methods of exiting. If the desire is for a more long-term plan then your options might include letting it run dry, selling your shares, or simple liquidation. If the desire is something more short term then your options might include going public, selling, or merging with another company. All options depend on the state of your business at the time of planning, so having an understanding what each entail, is essential.
Creating an exit strategy should be given time and taken seriously. This might include creating an independent board or taking your own time away to develop a clear strategy. There is a myriad of options that extend even further than the ones already listed. At the end of the day, the more time and effort put into this process, the more fit you will be to start your next venture.
Kelly D. Scott
The world’s leading business advisory and executive coaching organization