Most people don’t venture into the idea of opening their own business with plans of closing, selling, or liquidating it. But sometimes, it is wise to develop an exit strategy for your small business beforehand. It can only benefit you to prepare for every future scenario, including the not-so-great one. What will you do once your business path has run its course and you need to say goodbye to it? A sound business exit strategy is a way to go. And that is where a business brokering service should come into play.
What Went Wrong
Although not all business debutantes are financially savvy in managing and running their own business, that doesn’t mean that their ventures are doomed from the beginning. You needn’t be a marketing or a financial wiz for your business to succeed. Sometimes you just need to offer a good product or a service. And with a bit of luck and timing, you’ll be on your way to making it big.
But sometimes, despite your best efforts, the circumstances just don’t go your way, and you have to cut your losses. Maybe you’ve overextended your reach and started too big and too ambitious. Perhaps it’s time to downsize your property and equipment. In that case, you may need to rent an on-site storage solution. It is the best way for you to protect your sensitive equipment while keeping it near and available to you at any time. With that taken care of, your property will be safe, and you’ll have time to think about more important issues.
Types of Business Exiting Strategies
Sell the Business
Choosing a buyer you know and can trust is advisable. Alt tag: Two arms shaking hands, representing one way to develop an exit strategy for your small business.
Selling to a partner, employee, or family member is an enticing option. They will already be familiar with the company situation and your terms. You will be able to negotiate the sale in a lot more flexible and relaxed manner. And there will be almost no possibility of any nefarious dealings by anyone involved. Just try not to let your emotions get the better of you. Everyone should get what they want out of the arrangement and hopefully remain on the best of terms afterward.
Sell Your Business to Another Business
A competitor or a similar business would be interested in acquiring your business. That way, they would take over an already established company without needing to start from the ground up. Also, they will be somewhat familiar with your operations and management because you are in the same type of business. There is also a possibility that you get offered to stay and run the company on their behalf, which can be an attractive option if offered.
If you don’t see a way for your business to be profitable anymore, liquidation is an advised strategy. By liquidating, you will manage to pay off all your debts, along with paying out your investors and anyone affiliated with your former business. You will end one entrepreneurial endeavor without compromising yourself and keeping your business contacts and connections available for any future prospects.
Also, keep in mind that most companies lose track and idea of what to do with all of their office equipment and furniture while in the process of liquidation. To avoid such hindsight and minimize your losses when it comes to company property, experts from Zippy Shell of Greater Philadelphia advise that you timely contact a reliable moving company and make all the necessary arrangements.
This is the last resort at your disposal, and you should be absolutely sure that you want to use it. If you have exhausted all other solutions and your business has sustained too big of a hit to recover, you should consider filing for bankruptcy. But not before you’ve consulted a good business managing company that can offer you a way out of this situation.
After the bankruptcy has been declared, you will be free from all debt your company may have accumulated during its losing streak. However, remember that the seizure of assets will compensate for the deficit if other means aren’t disposable.
How to Develop the Best Exit Strategy for Your Business
Get Your Business Valuated
No one can successfully sell something unless they know exactly how much it’s worth. And the same goes for your business. Before you consider doing anything with it, first, you must know its most accurate market value. Crunching numbers when it comes to the inner workings of a business isn’t easy. You are advised to delegate such a task to a professional company. That way, when you are ready to take the next step for your business, it will be one in an informed direction.
Consider Your Options When You Decide to Develop an Exit Strategy for Your Small Business
Think about how and why you might need to exit your business:
- Would you like to abandon it and pursue something else entirely?
- Would you like to stay affiliated with your company but in a lesser capacity?
- Maybe the particular type of business has run its course, and it is time to rethink your future strategy and its way forward, but not close it completely.
Organize Your Finances
You need to be fully aware of the impact this exit will have on your personal and professional financial status. It would help if you had a good grasp of your business’s expenses, performances, and assets. You can make sound business judgments only when you are aware of all your business mechanics. By all means, hire who you need to get the insights and numbers on your business. But also, never forget to have your own assessment and appraisal done. That’s the only way you’ll have a complete picture and a bulletproof conclusion to make when the time comes to develop your business exit strategy.
Announce Your Decision
Be loud and clear about your decision
It’s only natural that once your plans are set, you inform everyone affected by them. Maybe in the process of preparing them for your decision, you get some better ideas, advice, or suggestion on how to best proceed with the exit and conclude your cooperation to everybody’s satisfaction. It’s best for your professional and personal image to part ways with everyone you worked with on the best of terms. You will be much appreciated for it and regarded as an excellent former employer, partner, and perhaps an even better future one.
No one starts a business expecting to fail. However, if you develop an exit strategy for your small business, you create a safety net. It will help you get back on your feet more easily, whatever may happen.