By: Patrick Ungashick
You, like every owner will exit from your business, one way or another. Either during your lifetime or at death, your business will be given away, sold, or liquidated. These three outcomes are not exit strategies. The word "strategy" implies a desirable result. Death is not a strategy!
There are, in fact, four potential exit strategies for a happy exit. Once you've determined when you want to exit (review here our explanation of The Rolling Ten Years Phenomenon to determine when is your best time to exit), you need to identify as early as possible your most likely exit strategy and create a clear path to plan and execute what is needed to achieve a successful exit. The four possible exit strategies are:
- Pass to Family
- Sell to Outside Third Parties
- Sell to Inside Key Employees
- Planned Liquidation
We differentiate between these four strategies because the issues and tactics used for each strategy are different. For example, if you want to pass your business down to your children, you face a different set of challenges and must pursue a different set of tactics than if you want to sell your business to an outside buyer. Or in another example, selling your business to an outside third party buyer is a completely different process-with completely different needs and challenges-compared to selling it to key employee inside buyers. Defining the right exit strategy for you, can be overwhelming and might slow your exit planning process which could prove costly.
Over the next four months of this Exit Playbook™ educational series, we will examine each of the four strategies in detail. In the meantime watch this short video and download the attached Exit Strategy Decision Tree™ tool which will demonstrate how different each strategy is and how important it is to set your business plans early to control the successful outcome for your exit from a business you've worked so hard to build.
NAVIX Founder Patrick Ungashick on the Exit Strategy Decision Tree™.