With the cost-of-living crisis causing financial hardship for businesses across the country, ensuring you have an exit strategy for if the worst should happen is an important thing.
Whilst it goes without saying that every business hopes it won’t fall into financial problems, having an exit strategy can reduce overall monetary losses, as well also help you plan the future of your business too.
What is an exit strategy?
In short, an exit strategy is a business plan which will allow you as the owner(s) to leave your business.
It can be in place for a number of different reasons, such as deciding to retire, ill health, or wanting to take your career down a different path. However, an exit strategy can also be decided upon so that the owner(s) lose as little money as possible should the business become insolvent.
There are several different types of exit strategies, the suitability of which will depend on what the purpose of exiting the business is.
Why are exit strategies important?
Making sure you have an exit strategy planned earlier on in your business’ life can help you drastically.
Not only does it allow you to feel rest assured for the future of the business, but it also makes sure you have more control over what happens; if the worst should happen, you have plans in place to ensure both your own financial security, as well as the security of the company.
Planning can also allow you to progress your business in the way you want, as you can lay out your future plans to potential investors, as well as to other senior members in the business when it comes to making decisions about the future.
Finally, by planning your exit strategy, it will make your departure from the business easier, as you will be able to inform the relevant people what will happen with the business before you officially decide to leave.
Types of exit strategy
There are four main different ways of exiting a business. The route you decide to take will vary on what your situation is when you decide to leave.
This post is the first in a series, and so these four types of exit strategies will be expanded upon throughout the rest of the series.
If you would like advice on exit strategies, please do not hesitate to get in touch with us today.
