This topic may not be something you want to think about, but it’s something every small business owner will have to confront; what is your exit strategy?
An exit strategy is exactly what it sounds, an outline of what will happen to your business when you leave. The goal is for the transition to be as smooth as possible.
There is no right or wrong reason for wanting to leave your small business, but the best exit strategy is making the best decision for your business.
Exit strategy options
- Lifestyle entrepreneur. Although this isn’t technically an exit strategy, reframing your business plan from growth to stability is an option if you have a steady income.
- Give the business to a family member. This tactic, also known as having a “legacy,” is great if you have a family member who wants to do what you do. What’s even better is the extra time you have to groom your successor for the position.
- Find an acquirer. This option is for those who don’t have a legacy, but want to take care of their employees. Remember when it comes to negotiating that your employees came to work for you, not necessarily the business.
- Get bought out by current employees. This option typically goes a little smoother than the latter option, but don’t forget that different management can have growing pains come with it. It’s also easier to negotiate staying on and working part time if you’ve worked with your successor in the past.
- Sell your stake. The most “business-as-usual” strategy is to sell your stake to a partner.
- Plan an IPO. Only 7,000 out of every 1,000,000 companies go with this option, but the more you know.
- Liquidate the business. This is the most final and no-strings attached option. The cash you make from liquidating will need to go to any debts or unpaid bills, so if making money from your exit strategy is what you want there may be better options.
- File for bankruptcy. Although nobody wants this, it is an option during times of trouble. Remember, it’s not the end of the world.
Questions to ask yourself
How long do you want to stay in the business? Don’t get offended by this question, everyone wants to enjoy retirement eventually! This will help determine the best option for you.
What are you financial goals? When it comes to planning (and let’s be honest, running the business) this is one of the most important questions. Knowing the answer to this before consulting with your lawyer or accountant will make your choice much more clear than if you go in unprepared.
Of course American Quilt Retailer wishes you the best of luck in your retail endeavors, but we’re also here to help with whatever question you may have. Feel free to comment below what’s helped you the most with your exit strategy.
Have you heard the news? American Quilt Retailer is hosting the opening session at spring Quilt Market in Kansas City! Their Schoolhouse Series includes breakout sessions and an opportunity to gain firsthand knowledge from the people who make, design, or write about the products you sell. Register to attend today.