What’s your exit strategy
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The document discusses different exit strategies for business owners, including just closing the business, selling to family or friends, being acquired, or pursuing an IPO. It outlines the pros and cons of each approach. Just closing the business is easy but leaves money on the table. Selling to family risks challenging dynamics and may not get full value. Being acquired provides a bigger payout but risks cultures clashing. An IPO provides the biggest payout if successful but requires giving up control and only works for a small number of companies.
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What’s your exit strategy
- 1. What’s Your Exit Strategy? Wray Rives CPA CGMA www.NeedaCPA.com
- 2. Lifestyle Company Minimal investment in growth Big take home pay for owner Live on the income Autopilot operations www.NeedaCPA.com
- 3. Exit Strategy-Just Close It • Pros • Easy • Low stress • No negotiations • No transfer of control • Cons • Leave money on the table • Post ownership finances • Reputation takes a hit www.NeedaCPA.com
- 4. Exit Strategy-Sell To The Kids • Pros • Comfort level • Little to no due diligence • More likely to preserve your legacy • Cons • Could still leave money on the table • Transfer of control can be complicated • Can challenge family dynamics www.NeedaCPA.com
- 5. Exit Strategy-Sell To A Friendly Buyer • Pros • Comfort level • Less due diligence • More likely to maintain status quo • Commitment to make it work • Cons • Still leaves money on the table • Could end a friendship when they find your skeletons www.NeedaCPA.com
- 6. Exit Strategy-The Acquisition • Pros • Bigger payday • Strategic buyers may pay more than it’s worth • Cons • Cultures clash in merged companies • Acquisitions are scary • Acquisitions are messy • Acquisitions are costly www.NeedaCPA.com
- 7. Exit Strategy-The IPO • Pros • Biggest payday when it works • You might get to ring the bell at the New York Stock Exchange • Cons • Only a very small number of IPO’s succeed • It takes time (5-8 years) • You will give up a lot of control • You need to be a grown-up company from day one • VC’s and investment bankers get their share of the pie www.NeedaCPA.com