A Beneficial Exit Strategy?
After a while when the business is successful you may want to exit to rest or to cash on it and do other things or start another business. You may also want to exit a failed business and quit the business altogether. For a successful business, you need an exit strategy;
To be able to sell an ongoing business for value, you will need to focus on things that will create value over time during set up and operation. We focus on one of these methods:
The value of a business is the estimate of its worth. A business has a high value if it has a healthy bank balance, valuable assets, a higher profit margin, and strong promising profitable and enduring future. Operate the business with modern management structures, policies, procedures, rules, with self-executing systems
You need to create value and goodwill in your business. You do this by creating a valuable self-selling product or service. It needs to be a product or service that is useful and solves people’s problems.
You can exit a successful business in several ways that include taking free cash, an outright sale, and partial or complete selling shares.
Methods that can be used to exit an ongoing successful business include, Free Cash (building the business by reinvesting profits into the business until it is doing well while taking the rest of the profit (free cash) for other personal uses and Management or Employee Buyout (selling your business to all employees).
It is not uncommon for a business to struggle and eventually fail. Many startups do indeed falter and many eventually fail. If you have a business like that, it may be difficult to sell at a good or fair price. You can exit a businesslike this through liquidation or bankruptcy processes.
These processes are governed by laws and these laws differ from country to country. Examples include Liquidation i.e. selling business assets.