Many a times people want to invest in a business but that is for a short span of time. The two frequently thought things in this case are: when would they get the returns for their investments and how much will their profit be. It is thus important that while you are making your plans for your business, you should have the strategies for your exit up your sleeves too.
It is good that you inquire from yourself what your intentions are regarding your business; whether you want to linger on with it for a long time or you want to wrap it up completely after some time or hand it over to someone else to run it. If you are clear sighted about what you want from your business it becomes rather easy for you to strategize your exit.
There are many forms of business exit, they are:
(a) M&A or merger and acquisition
(b) IPO or initial public offering
(c) Selling to a friend
(d) Make it your cash cow
The first one very simply means to merge or combine with a company that is larger than and similar to yours. This is profitable for bigger already established companies in increasing their revenue, as they do not have to make new products. They already have the resources and skills needed for making it a success.
One of the well known M&A professional firms is Generational Equity. They are a team of specialists when it comes to the question of corporate mergers. They deal a lot with middle market business owners, and can guarantee you the perfect time to make your deals with other companies.
The professionals at Generational Equity are also capable in assisting you with other forms of business exit strategies, by anticipating the challenges that might come your way. They provide customized strategies for each of their clients individually and can think and understand the requirements at every stage of a transaction.
The most preferred mode of exit is actually the second one, i.e. the IPO. It is said to be the short cut to wealth. In this, the public is given an open invitation to buy the company’s shares at a fixed face value. But with a drop in the percentage since the Internet bubble burst in 2000, this mode is now less recommended by professionals.
Another easy exit is to give your business into the hands of someone who is totally experienced in the operations of it and worthy to handle things on his own so that you can take off, pay your investors, clear your debts, etc.
Making your business your cash cow is also not a bad idea. If your business has steady revenues, you should look out for someone who will be able to run the business for you so that you can use the excess cash to start off with your next great business venture while retaining the ownership and annuity.
If nothing else seems lucrative then go in for liquidation, wherein you just shut down your entire business. It is better to come out of a good situation through an exit rather than trying to come out of a bad one during crash down.