In many cases, business owners don’t develop an exit strategy until it is too late. Most of the time, the extent of the existing exit strategy is hoping someone will walk in the front door with a big check or just having faith it will take care of itself.
For those owners that want a little more strategy than that, we look at the following to help determine which alternatives might be a good fit:
- Owner Financial Independence – Can the owner survive and thrive without the income from the business? We look at all future income and expense streams and see if it is feasible to sell the business and move on to life’s next challenge.
- Business Independence Evaluation – Can the business operate without the owner overseeing the day-to-day operations? If not, then we need to develop a strategy to get the business positioned to operate independently.
- Clarify Event Timing – When do we want the exit to take place? Is this a contingent exit strategy triggered in the event the business owner is unable to run the business? Or is this a strategic timing event to transition the business and reallocate business assets to a different investment?
- Identify Possible Acquirers – This is one of the most challenging topics. To whom does the business owner want to transfer the business? Employees? Family members? A third party? In many cases, this is the key that helps determine the path for the transition.
- Identify Exit Alternatives – At this point, the options for exiting typically become a little clearer. There may be one that jumps out and is the obvious winner, but most of the time, there are still a few options that need to be discussed to determine which is the best fit.
Developing an exit plan is not a one-size-fits-all strategy. We need to understand the objective of the business owner and help develop a strategy that best fits their needs.
Could you use some help with your exit strategy? If so, give us a call – we’d love to learn more about you and your business!
PLEASE NOTE LIMITATIONS: Please see Important Advertising Disclosure Information and the limitations of any ranking/recognitions, at www.fostergrp.com/disclosures. A copy of our current written disclosure statement as set forth on Part 2A of Form ADV is available at www.adviserinfo.sec.gov.
PLEASE NOTE LIMITATIONS: Please see Important Disclosure Information and the limitations of any ranking/recognitions, at www.fostergrp.com/info-disclosure/. A copy of our current written disclosure statement as set forth on Part 2A of Form ADV is available at www.adviserinfo.sec.gov.