Are you seeking a new challenge in your business career?
Business owners seeking an exit from the companies they’ve helped build and grow have a number of options at their disposal. These are five of the most common.
- Sell to Another Entrepreneur
First, you can sell your company to an entrepreneur seeking a foothold in your industry. This supports the growth-by-acquisition strategy favored by many entrepreneurs.
“Acquiring existing companies is an excellent way to gain exposure to growing industry niches,” says Miami-based entrepreneur George Otte, whose Otte Polo Group has acquired several companies since 2006.
If possible, seek out entrepreneurs who share your values and overarching vision for your company.
- Merge With a Competitor
Consider merging your company’s operations with those of a larger competitor.
While this can be an emotional process, it’s often a sound way to realize a return on your years-long investment in building and growing your company. However, it’s not the best choice for entrepreneurs seeking a rapid exit, as former owners may be asked to remain on as consultants or employees for months or years following the merger.
In some industries, finding a willing merger partner can be a challenge as well. “Traditional bricks-and-mortar companies are increasingly tough to sell…in today’s tech-fueled economy,” writes Forbes contributor Bill Hennessey. Have a backup plan in case your efforts to find a merger partner fall through.
- Transition to the Next Generation
If you have children or younger relatives who are willing to take over your organization, begin training them as early as possible. This is a multi-year process that will require you to hand off ever-greater shares of responsibility for your organization’s operations. Done successfully, it ensures that the company you built remains in good hands for decades to come.
- Sell Your Stake to a Partner
If you run your company with a partner or group of partners, consider selling your stake to them. Like transitioning to younger ownership, selling to a partner ensures that your organization remains in capable hands—and with owners who in all likelihood share your vision.
- Liquidate and Shut Your Doors
When no other viable options present themselves, your best choice may be to shut down your business’s operations through an orderly liquidation process. You will almost certainly need assistance from a host of outside experts at various points in the process, but this general primer offers a basic overview.
Keep in mind that some types of businesses are less complex to liquidate than others. For instance, liquidating a retail outlet is relatively straightforward for owners willing to follow the well-worn processes for doing so.
Consult With a Professional
It’s important to underscore that every business is unique—and so is every business owner. Your business exit strategy is likely to be very different from that of your competitors, and certainly different from that of companies in other industries. Before you arrive at a decision, consult with an experienced business adviser who can talk you through the options at your disposal and help you choose the one that best fits your needs.