Know Your Exit Strategy from Day #1
Unlike their parents and grandparents who waited till their 60s to exit their businesses, today’s “cash-out generation” of entrepreneurs exit their successful businesses in their 40s, often to pursue new business ventures.
The key to a smooth and successful exit for this cash-out generation is early planning. The day you start your own business is the day you should define the personal and financial goals needed to establish an exit plan. Without goals and a good plan in place, it is unlikely that you as an entrepreneur will be able to exit when you want — and for the money you want. Once the exit plan is in place, you should review it annually so you can stay on top of your progress toward personal and financial objectives.
Several questions you might have regarding the exit plan are: When should I sell the business? Whom should I sell the business to? Who should be involved in the process?
The best time to sell a business is when you have attained your definition of financial independence or when you feel financially and emotionally ready to embark on a new business venture. When the right time comes, you will have several options as far as to whom to sell the business.
Candidates include third-party buyers, key employees, or family members. A third-party sale is usually the most successful, because it enables you to negotiate the highest possible purchase price while giving you financial flexibility and improved probability of closing the deal.
Ned Minor Author Deciding to Sell Your Business: The Key to Wealth and Freedom Denver