Exit Strategy last thing on your mind? Think again.

If you’re like most entrepreneurs, the last thing on your mind is an exit or succession strategy. However, this is is a critical responsibility you should address even before you launch your company. Family businesses often pose even more challenges than the world’s largest corporations.

Your exit strategy should address more than just yourself, but all other owners, partners and shareholders. Sometimes, circumstances change. You may think you’ll never want to leave your company until you “die on your pencil.”

Yet, what if you receive a fabulous offer to sell the business you’ve built? Or a key partner or owner dies unexpectedly? These events can generate serious consequences for the business you love; none of these consequences are good.

Effective Exit Strategies

Pay yourself well before getting out. Don’t be shy. You’ve earned a fabulous salary if your business provides the monetary rewards and lifestyle you have always craved. Yes, there can be great value in reinvesting profits. However, reinvesting in yourself is usually a winning strategy.

Pass on ownership to a qualified family member. The key word is “qualified.” Do not simply adhere to the old world tradition of naming your oldest child as the owner and CEO of your business, unless he or she is qualified to manage the company successfully.

Liquidation strategy. If you decide enough is enough, and your company is irrevocably attached to your name, selling the business with your name may not be a good option. Just having the business end and liquidating company assets may be a good option. If the business brand (not your name) is valuable, liquidation may be the worst option to maximize returns. You decide.

Whatever exit strategy you adopt, be sure you have one. The key is to have a written exit strategy. When you’re undecided about the best exit strategy for you, contact The Carleton Group for valuable advice and help.