The biggest advantage of implementing an Exit Strategy in selling a business lies in simplifying the whole process. Instead of taking many big steps at once, a seller aware of selling their business is able to start in advance, break down the whole process into a number of actionable steps and incorporate them into daily activities. Not only is this way of selling a business very organised, but, more importantly, it also helps maximise profits. In essence, the Exit Strategy protects your greatest asset – your business – in a similar way insurance does.
Once the decision to sell is made, the seller is advised to contact a business broker and together discuss various options. A professional business broker, who often facilitates the transaction between the buyer and seller, can be very instrumental in helping you write a well-rounded Exit Strategy and scrutinising a Buy/Sell Agreement.
An easy way to view your Exit Strategy is to look at the sale from the buyer’s perspective. Determine what you might be looking for when buying a business and put those affairs in order – whether it is repairing a part of the building or balancing numbers in a statement. With the overall picture in mind, necessary adjustments can be slowly acted upon over a period of time and thus help exchange hassle for ease.
Finally, the last step is considering tax consequences and handling transaction money. Different types of financing arrangements have a direct impact on the amount of tax you pay and are worth considering. Sellers are also often asked to help with the transition. Proactive work and an efficient plan can therefore greatly enhance profits at the sale and minimise expenses.