A Business Plan Exit strategy: How to write – This has to do with development of Exit strategy template with exit strategy examples. Therefore, this post presents exit strategy framework essentials for business plan writing.
Furthermore, are how to write an exit strategy for a business plan for partnership. Doing this include exit planning strategies for entrepreneurs of any form of business structure. In fact, the four possible exit strategies are: Pass to Family, Sell to Outside Third Parties, Sell to Inside Key Employees or Planned Liquidation.
What is a business plan:
Table of Contents
Considering A Business Plan Exit strategy: How to write, a Business Plan Exit strategy is a segment of business plan. Therefore a business plan inclusion of exit strategy is important. A business plan is a business road map. So, it encompasses all aspect of business operation and behaviors for commercial activity purposes. Therefore, matters relating to business success and failure are included. That is why exist strategy is important. It defines what the entrepreneur will do when the business fails.
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A Business Plan Exit strategy: How to write
What then is exist strategy?
Every business must have exit strategy business plan which serves as the business exit strategy framework. A business exit strategy is a plan that a business makes to hand over the company, or share in a company to other investors, other firms or individual for particular reasons.
So, no matter the legal form of the business as a sole trader, partnership, limited liability company or an NGO, exit strategy plan is inevitable. Therefore, there are Pass to Family, Sell to Outside Third Parties, Sell to Inside Key Employees and Planned Liquidation. This framework has to be indicated in the company business plan.
The place of exit strategy in the business plan:
Furthermore , on A Business Plan Exit strategy: How to write, an exit strategy in business shows how you plan to leave the business. So, an investor would want to know what happens to his/her investment when the operator wants to leave. Again, exit plan therefore helps to ensure a healthy return on investment to the investor or entrepreneur. At least, it shows how he can recover his investment when the going becomes rough. In any case, exit strategy framework is vital whether the business is successful or not.
As a matter of fact, exit plan gives a business owner a way to reduce or liquidate his stake in a failing business. That is how to limit losses. On the other hand, it shows him how to make a substantial profit if the business is successful.
A Business Plan Exit strategy: How to write
Business Exit strategies:
Here are the relevant exit strategies you can embark on in your business. They are those associated with failing business or successful business. On the other hand, they are strategies to revitalize the business or to liquidate it.
We present 5 important exit strategies here for your understanding. Note that each one has its peculiar circumstance.
Merger & Acquisition (M&A):
On A Business Plan Exit strategy: How to write, this is where similar companies come together. It can also be that a larger company buys the smaller one. Under business combination, this is a win-win situation where the merging companies have complementary skills, and can save resources by combining. And for a bigger company, this gives room for more efficient and quicker way to grow revenue than creating new products from scratch.
Initial Public Offering (IPO):
This used to be the preferred mode, but things have changed. As at now, it’s not a good approach to startups. In fact, todays shareholders are so demanding, and liability concerns get higher for start ups to manage.
Sell to a friendly individual:
This is another way to cash out. If you do this, you will be able to pay investors, pay yourself, take some time off, and get ready to have some fun all over again. You have to ensure that the buyer is someone who has more skills and interest on the operational side of the business, so that it can scale up.
Make it your cash cow:
Furthermore, on A Business Plan Exit strategy: How to write, if you have a stabilized business, you can think of handing over to an efficient operating outfit who will ensure the business continues. But for now you pay off investors, find someone you trust to run it for you. This will enable you use the remaining cash to develop your next great idea. In this case, you retain ownership and enjoy the annuity.
The other aspect of this is when you pay of investors and hand over to family.
Liquidation and close:
At this time, you can decide that enough is enough. We often overlooked this exit strategy. It simply means decide to shutdown, close the business doors, and liquidate
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Founder/Managing Partner of Complete Full Marks Consultants Ltd. An Economist turned Chattered Accountant and Tax Practitioner with over 37 years of industrial experience.
