Many people who go into business in Minnesota envision their companies growing, expanding and making them rich. According to Chron.com, one way to realize this dream is to create a way to wind up the business while it is still going strong. This process, called an exit strategy, should be a part of every business plan.
Aspects of bringing the operation to an end include fulfilling and resolving all open contracts, selling assets or transferring them and having a professional provide a valuation of the business. Addressing the issue at the beginning may make it impossible to foresee a single best strategy, so it may be wise to consider two or more possibilities and include steps toward each.
Chron.com notes that there are many options for a business owner who is ready to step away from the responsibilities of the company. One of these that typically requires careful planning from the outset is the lifestyle company. For example, a professional such as an attorney, counselor or consultant may wish to open a practice without the intent of expanding. Instead, he or she may take the earnings from the company as personal payment and continue the enterprise for as long as it is financially beneficial.
Often, business owners decide the best exit strategy is to sell the company to a family member or other individual through a friendly sale. This allows the continuation of the person’s legacy and may provide a loved one with a career. The sale could also be a merger or acquisition.
When a business is generating little or no income, an entrepreneur may determine it is best simply to liquidate all assets, pay off debts and close the doors. While this may not be a future that a person wants to prepare for at the beginning, including it in the business plan as one alternative exit may provide an easy way to leave a venture that has not paid off.