What is your exit strategy?

By Mike Martin, Loan Portfolio Manager, Wyoming Business Council

Whether you are just starting a business or have been in business for many years, it is important to think of an exit strategy.  Will I be able to sell my business or will I have to close it down when I am ready to move on to other interests?

It seems that the only people who discuss an exit strategy in their business plan are serial entrepreneurs who want to grow a business and then sell it so they can start another one.  The owner of a family business needs to consider their exit as well.  Will the kids take over the business or can I sell it to one of my employees? 

Thinking of an exit strategy causes you to think of the future.  Planning ahead helps chart the course and writing and regularly updating a business plan is the most useful way to look to the future of your business. 

If the future of the business with you at the helm is only three more years, then you better be thinking of what will happen to the business at the end of that time.  What can you do now to ensure that there will be value to a potential purchaser of the business?  Should you upgrade equipment, grow your customer base, improve financial reporting systems, or groom family or key employees to take over the business.  Maximizing the value of your business will not only make the sales price higher when you are ready to move on, it makes you business more valuable now.

Even though you are as busy as you can imagine running the business, it is important to think of your exit.  After all, your financial future depends on it.