Author Box
Articles Categories
All Categories
Articles Resources

Businesses Without Exit Strategies Often Die Slowly

June 12, 2012 | Comments: 0 | Views: 141

Choosing the time to leave your business

With so much emotional energy invested into your business you are likely to not make the right decisions when it is critical to do so.

For example, when you are throwing good money after bad in your business and watching it all going to waste, you try and hang in there hoping that things will get better.

Too late, the business folds and all your investment goes with it.

What is an exit strategy?

In the initial business planning stage you need to decide how and when you will exit your business. Normally the exit planning covers situations such as;

  • The market stalls or declines rapidly
  • Someone makes an offer to buy your business
  • Sales revenue drops below a certain trigger point for a period of time
  • Licencing laws change making it impractical to continue cost effectively
  • You want to retire or hand on your business to your family

Your exit strategy will include the details necessary so you can make the right decisions when a moment of crisis impacts on your business operations.

Recent example of not having an exit strategy

A new start-up business in the childrens party industry based its financial forecasts on certain trading hours. Everything looked good in the budgets and predicted sales forecast were achievable.

Before opening the leased premises the new business hit a snag with permits and ended up with unplanned legal costs and forced changes to the trading hours.

This is where the exit strategy plan would have been useful for reference. With no strategic review of their current situation the owners continued to launch their business idea.

What happened?

Months later the business is struggling to make costs and has little cashflow to stimulate additional sales through advertising. It seems that no one reviewed and adjusted the prior budget based on the initial opening hours.

The adjusted hours does not give enough hours per day to make the planned sales and the planned advertising budget was used to meet the legal costs.

At this point the owner should have thought about an exit option. Looking at the actual budget and lack of advertising budget the owner should have established a certain profit/loss figure as a trigger point to exit the business.

Why have an exit plan?

By planning early you already have the phone numbers and contracts established to sale equipment and stock in an orderly process. The other option is to suddenly realise that you have to lock your doors because you became insolvent just after lunch, and breached all your contracts.

It costs nothing to have exit strategies and will save you peace of mind when or if the moment comes to your business.

Information supplied by Paul Baker

Over twenty years of business development & change management strategies successfully used in National organisations across Australia. The focus is on continuous improvement of business systems to stimulate growth through our principles of Initiate, Inspire, Innovate.

Customer-centric focus using our extensive experience in consumer behaviour and business process operations to find ways to help business owners manage their organisations.

Avatar Business Intelligence

Source: EzineArticles
Was this Helpful ?

Rate this Article

Article Tags:

Exit Strategy


Succession Planning


Business Strategy Planning


Selling Business


Exit Planning

In India, employment opportunities are set to grow by a good margin in the coming year, a phase which was started in the turn of the second decade of the 21st century. organisation, candidates with

By: Sarkariexam l Business > Careers Employment l April 01, 2013 lViews: 11718

Sometimes it is amazing to see that certain jobs can precipitate huge turnouts in the recruitment drives. It is as if thousands of people were waiting for the vacancy advertisements and the moment

By: Sarkariexam l Business > Careers Employment l December 30, 2012 lViews: 692

In recent times, jobs in healthcare segments have grown tremendously. It is anticipated that this growth curve will continue for the times to come. Various factors are responsible for this

By: Sarkariexam l Business > Career Advice l December 27, 2012 lViews: 449

Are you in a dilemma whether to choose web based CRM or not? If yes, don’t worry. You aren’t the sole person having this doubt.There are numerous firms trying to make out whether investing in a

By: Reneta Vasileva l Business > Customer Service l December 23, 2012 lViews: 410

If you think about it you will realize the fact that each business has its own set of risks that are involved in it.The trade secrets that you have and the information related to the business is what

By: brumbrum1 l Business > Risk Management l December 23, 2012 lViews: 264

As the time is changing, concierge management services are now growing despite the slowing economies of the world. The main reason of it is the need that is highly specific to the people who like to

By: willsmith10 l Business > Management l December 23, 2012 lViews: 334

Then, the form needs to be properly filled up, attach the required documents, and get fingerprinted. Then, deposit them to the VCGLR’s office along with the required application fee. The

By: Simon Lival Business > Strategic Planningl December 11, 2012 lViews: 198

Your business needs to do several key things in order to compete properly with other, similar companies. Your company should have a niche, something which no other company can offer.

By: Tez Artl Business > Strategic Planningl June 29, 2012 lViews: 218

Every business is going to need corporate training programs to ensure that their employees are up to date with the latest features and resources of your growing business. However, you would need to

By: Abhishek Kumar Khandelwall Business > Strategic Planningl June 29, 2012 lViews: 171

Virtual events offer a highly interactive environment for event organizers, customers, sponsors, and vendors to chat and discuss about their business goals and long term objectives. These events also

By: Jonathan Reynoldl Business > Strategic Planningl June 27, 2012 lViews: 205

In the midst of conflicting positions regarding the status of self employment in the country and the whole world as well, many people are still turning to self employment opportunities for various

By: Tim Baberel Business > Strategic Planningl June 26, 2012 lViews: 181

Tipping Points happen in nature all the time, it happens with bacteria, population growth, weather, sand dunes, straw on a camel's back, the flu, and yes, also in business with brands, innovations,

By: Lance Winslowl Business > Strategic Planningl June 24, 2012 lViews: 204

Running a business or an organisation involves risks with even the common daily activities. Most risk managers in organisations focus only on the risks involved in safety systems to avoid being fined

By: Paul Bakerl Business > Risk Managementl July 12, 2012 lViews: 200

Marketing your business using mailing lists can be a very cost effective way to advertise. The problem comes in the low level of responses from the targeted mailing list each time it is used. There

By: Paul Bakerl Business > Marketing Directl July 06, 2012 lViews: 199

It seems that everytime I turn around I see a new advert promoting some new age medical treatment promising to fix whatever you have. The problem with new age treatments is when you run a business

By: Paul Bakerl Health & Fitness > Alternativel July 01, 2012 lViews: 234

Every tattoo has a meaning and it is wise to find out what yours means before permanently adding it to your lifestory. People get tattoos because they often represent something deep and personal

By: Paul Bakerl Arts & Entertainment > Tattoosl July 01, 2012 lViews: 207

One of the best ways to teach people is through the use of roleplaying scenarios. I don't mean the bad roleplaying you see in some training workshops as adult students struggle to get comfortable

By: Paul Bakerl Gamingl June 14, 2012 lViews: 121

Your organisation has spent a large amount of money to develop the latest strategic plan and set your company goals. So how do you keep your organisational goal in everyone's mind at all times? It

By: Paul Bakerl Business > Strategic Planningl June 13, 2012 lViews: 165

Discuss this Article

comments powered by Disqus