Small Business Exit Strategies

Small Business Exit StrategiesIt is important to know how you are going to get your money out of your business when the time is right. Developing an exit strategy in advance gives you better control over your business’s future, according to an article at About.com. Here are a few of these exit strategies.

1. Liquidation. Liquidation is only profitable if your business has valuable assets to sell, for example, land or costly equipment. And even still, any profit you make from selling assets has to go to creditors first. In some cases, liquidation is the only option available for small business owners.

2. Keep your business in the family. By keeping your business in the family you ensure that control of your small business will remain in good hands. And you may still get to have a say in
running the business. However, it can be extremely difficult to develop a family succession plan because the issue can be emotional.

3. Sell your business to employees. Your employees, provided you have any, may want to buy your business. This strategy can be profitable for all parties concerned. The employees will get an established business that they know well while you get trustworthy buyers that will take good care of your former business. You can set up this strategy through an Employee Share Ownership Plan (ESOP), which is a stock equity plan for employees, but it is not always necessary.

4. Sell the business in the open market. Many small business owners decide to sell their business in the open market. It is a good idea to “groom” your business before putting it up for sale in order to get as much money as possible for it.

If you are considering selling your business, you should discuss your options with an experienced business lawyer. Please contact a capable business attorney in Illinois as soon as possible.