Even those who don't wish to liquidate their enterprises in the foreseeable future can benefit from having an exit plan. Exit strategies allow business owners to pull out of the management of their operations and cash in their interests in the enterprise.
The appropriate exit strategy is largely dependent on the motives behind the exit. Entrepreneurs of a business that is folding may find that closure represents the most graceful exit, a strategy that is difficult to justify otherwise. Selling an enterprise is arguably more difficult, but is generally better suited to enterprises that remain profitable. An enterprise that is large enough can even undergo an initial public offering, but this is rarely considered.
Another consideration in the exit strategy is the future role played by the founder should the business change leadership. Some founding entrepreneurs may want to relinquish executive roles but retain some form of influence, whereas others may want to keep a stake in the business for the sake of cash flow and leave its management to more capable and trusted wards. Finally, an entrepreneur can simply decide on a clean break and leave it to the new individuals in charge.
Aging business owners who wish to retain their enterprises within their families can take steps to prepare an exit plan that details how their business' administration would pass to their heirs upon their retirement or death. This in turn must adequately outline other key details, such as the possibility of receiving revenue through the business as part of a retirement fund.
Generational Equity is a company that assists lower-middle-market enterprises in drafting and executing an exit strategy, valuing businesses and assets, and bringing sellers and buyers together. For more information on the company and its services, visit this website.
The appropriate exit strategy is largely dependent on the motives behind the exit. Entrepreneurs of a business that is folding may find that closure represents the most graceful exit, a strategy that is difficult to justify otherwise. Selling an enterprise is arguably more difficult, but is generally better suited to enterprises that remain profitable. An enterprise that is large enough can even undergo an initial public offering, but this is rarely considered.
Another consideration in the exit strategy is the future role played by the founder should the business change leadership. Some founding entrepreneurs may want to relinquish executive roles but retain some form of influence, whereas others may want to keep a stake in the business for the sake of cash flow and leave its management to more capable and trusted wards. Finally, an entrepreneur can simply decide on a clean break and leave it to the new individuals in charge.
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| Image source: businessinsider.com |
Aging business owners who wish to retain their enterprises within their families can take steps to prepare an exit plan that details how their business' administration would pass to their heirs upon their retirement or death. This in turn must adequately outline other key details, such as the possibility of receiving revenue through the business as part of a retirement fund.
Generational Equity is a company that assists lower-middle-market enterprises in drafting and executing an exit strategy, valuing businesses and assets, and bringing sellers and buyers together. For more information on the company and its services, visit this website.
