When you first start a business, your primary goal is most likely to get it up and running. Afterward, of course, you may find yourself extremely busy simply keeping it in the black.
But the years go by quickly and before you know it, ten, twenty, or more years can pass. At some point in time, you’ll begin thinking about how you’d like to exit the business.
Even if getting out of business hasn’t yet crossed your mind, there are reasons your business needs an exit strategy.
1. Grants Warning to Employees
Having an exit strategy in place allows you to grant warning to employees before closing the doors for good. This gives them a chance to seek employment elsewhere.
Furthermore, with a plan in place you may be able to provide staff members with an additional opportunity. For example, if you decide to sell the business, you might wish to approach an employee about buying it.
2. Provides a Way Out
As with any other type of job, business owners can get burnt out. Sometimes they are able to refocus and continue running their businesses full-throttle.
However, the time and hard work that goes into starting a business can be enormous. Many give up sleep, family time, and vacations in order to build a successful business. Needless to say, some owners reach a point of just wanting out.
This is one of the reasons your business needs an exit strategy early on. It’s far better to have one in place and not need it. Otherwise it’s possible the business may need to be closed due to lack of options.
Your business may also need an exit strategy in place for your retirement. When it’s time to slow down and hand the reigns to someone else, you need a way out. Having an exit strategy already in mind can help you retire on your terms.
Let’s say you have some type of medical emergency come up. Although unfortunate, it may be another of the reasons your business needs an exit strategy.
In such a situation, the last thing you want to be doing is trying to find a buyer. It takes time to pull together financial data, talk to prospective buyers, and meet with lawyers. When you are sick, you may not have the time to do these tasks.
Additionally, if you are ill, it may not be possible for you to complete the process on your own. But your family or a trusted friend may not have the knowledge or legal authority to do it either. That’s why your business needs an exit strategy already planned.
3. Allows for Other Opportunities
There’s always a possibility of becoming bored with your business. At that point you may wish you had created an exit strategy.
Of course, there are ways you might be able to regain your enthusiasm and become excited about your business again. However, if you simply can’t regain your focus, it may be time to turn to other opportunities. With an exit strategy already created you can do that.
Running your business takes time, energy, determination, and a whole lot of hard work. But that doesn’t mean you won’t ever want to move on from that phase of your life. When it happens, make sure you are prepared by having an exit strategy ready for your business.