Home Forums Money matters Planning for an exit strategy Reply To: Planning for an exit strategy

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cameronryan, post: 271230, member: 86268 wrote:
Hi Felix,

Yes, unfortunately most businesses do end up selling due to necessity rather than a well timed and well executed exit strategy. But I think this comes down to most people starting/buying a business with great intentions, enthusiasm, plans, etc and giving an exit strategy absolutely no consideration at all. An exit strategy should be considered at the time of starting/buying a business, not when it becomes a necessity.

If I look at certain franchises, it can cost $300,000-$600,000 to establish a franchise and very rarely can this be recouped upon sale. Hospitality – people throw hundreds of thousands of dollars into opening a swanky, trendy cafe or restaurant with little thought as to what profit they need to generate in order to sell the business at a level that repays their initial investment.

There is an abundance of information available online for ‘business plans’ and ‘starting a business’. There is about 25% the volume of information available for ‘business exits’ and ‘selling a business’…

Very true. Most business owners only start planning for an exit when it too late.

A business is a large investment – not only in money terms but also time, and business owners should definitely have at least some resemblance of a plan to successfully exit in order to maximise their ROI. (Workers have their super, small businesses have their business!)

Unfortunately, many business owners get caught up in the day to day and don’t end up thinking pragmatically about maximising the value of their asset.