Do I Need an Exit Strategy for my business? October 9, 2020 | Business Litigation
You have dedicated a considerable amount of energy and effort to building your company. You have made a success of it. You are now ready to move on. To do so, you must start planning a business exit strategy.
A business exit strategy is a description of how you want to transition from being the head of the company. You wrote a business plan to help you start the company. You will now need a business plan to end your responsibility for it. Before drawing up the plan, you should ask yourself the following questions:
• Do I want to sell the company?
• How much money do I want to make in this deal?
• What do I want to happen to the business after I leave?
• How long of a transition do I want?
You will also need to consult with a Palm Harbor business attorney. If you do not keep one on retainer or you have in-house counsel, you should hire a Palm Harbor business lawyer to help guide you through the process.
Here are some of the typical ways in which entrepreneurs exit their businesses:
1. Leaving it to family members
Most companies in America consist of small, family-owned businesses. People who are related to each other run even many high-end tech and professional services firms. If you started a company some decades ago and brought your children in to help you run it, then you may soon be ready to hand it over to them. To make this work, to keep the business in the family, you will need to groom successors over time. You will also need to ensure that your family—or at least the members involved in the business—can handle the volatility and stress of business ownership.
The great advantage of leaving your company to members of your family is that you get to train the person you want to succeed you from day one. You may also be able to serve as an advisor after you have left. The downside of this exit strategy is that the person you want to take over the business may not be capable of doing so.
2. Merging with another company
Many entrepreneurs choose this option. If you find a company that is similar to yours and whose goals are aligned with your business, a merger may be the best option for both organizations. The best thing about this option is your ability to negotiate the price of the sell. Something that is not possible if you take your company public.
Palm Harbor business attorneys have the expertise and experience to manage such negotiations so that you can come out on top.
3. Employee buyout
This is an option you should consider—especially if you have built a highly-skilled and dedicated workforce. The associates or employees of the company may be unwilling to let the company fall into the hands of someone they are unfamiliar with. They may choose to buy your company from you when you are ready to leave. This could result in a smooth transition and may give you less concern about the future of the company you created.
4. Take your business public
If you have created a product or service that is in high demand in the market, you should consider taking the company public. In many instances, this is the only way to get the resources and investment needed to produce on a mass scale. It will also result in a large profit. If you plan to retire after you leave the company, you may make enough on the IPO to set you up for the rest of your life.
Business attorneys in Palm Harbor FL can help you make the right decisions about your exit strategy. Palm Harbor business lawyers know the law, know the industry, and will get to know your aims. If you are thinking about leaving your company, you should speak to the business lawyers in Palm Harbor FL at the Law Office of Robert Eckard & Associates.