Developing an Exit Strategy Plan in Fort Worth, TX— 5 Exit Strategies for SMEs
As an entrepreneur and a small or a medium sized business owner, your adrenaline is at the peak and you would want the success to go on. However, markets are not meant to stay the same forever. Therefore, to investors want to know an exit strategy plan for SMEs. No matter how confident you are about a boat, you never go on a long trip without lifeboats, and the same is true in the case of businesses. Are you looking for exit strategy plan in Fort Worth, TX?
Read on to know how you can pull out your money from your business whenever you decide to sell it.
Strategic Planning for Exiting a Business
Exit strategy plan is a blueprint of how a business intends to sell the investment. These plans allow the investors or business owners to leave or retire if the business fails. Exit plan strategies let you remain in control of your business in the future. A strategic plan ensures that your business and its investors are protected. Even if you already have an exit strategy in mind, you should consider updating it as your business evolves. The exit strategy plan is dependent upon the size of the business. You can devise an exit strategy plan in Fort Worthfor you small or medium sized enterpriseby learning about the following plans:
1. Initial Public Offering
All businesses are classified into major categories —public or private. Initial Public Offering is selling the stocks of the company to the general public. IPO is a viable exit strategy plan for SMEs but its difficult and is not recommended for every business. This is because IPO is a long process and it is expensive as well. Going public can actually be profitable. However, withdrawing of your capital vastly depends upon the structure of IPO. A key thing to keep in mind when considering IPO as an exit strategy plan in Fort Worth, TX is that public companies have a higher compliance rate and stringent reporting criteria.
2. Merger
Sometimes, it is best for two companies to merge or combine the capital and assets to increase the worth of the business. Shareholders and investors love the idea of a merger because it increases the value of the business. If you are thinking about a merger as an exit strategy plan in Fort Worth, TX for SMEs, you will have to remain an integral part of the business. While you will still be managing a business, the employee recruitment might be carried out by the new business owner. Mergers are good for those SMEs who want to see their ideas across the finish line. Before developing a plan for merger, you should know that new business is in alignment with your values. Contradictory work cultures can result in a decline in the profit resulting in revenue loss. SMEs can make an exit strategy plan in Fort Worth, TX for any one of the following types of mergers:
- Merge businesses for market extension that target different markets
- Merge businesses to extend the range of products
- Merge businesses and make different parts of finished goods
- Merge businesses horizontally, that is, both the enterprises are in the same industry
- Merge businesses into a conglomerate where nothing is common between the enterprises
3. Acquisition
If you develop an acquisition strategy for exiting a business, you hand over the business ownership to the one who buys your business. While merger is a preferred exit strategy for small and medium enterprises, you can consider acquisition exit strategy plan in Fort Worth, TX. This is because you can name the price you see fit for your business and the other entity that wants to buy your business might be willing to pay more than the current worth of your business. However, it is important to note that you may have to sign an agreement that you will not compete against the business that you sold by starting a similar company. If you have an acquisition exit strategy plan, then make sure that it is friendly in nature as it would ensure that you part with your business exactly the way you wanted.
4. Liquidation
SMEs go for liquidation when they cannot afford to pay the debt. If you choose to develop exit strategy plan in Fort Worth, TX then it means that you will have to sell all of your business assets. In sole proprietorship small business, liquidation may be the only safe exit route available. Therefore, in order to make this strategy executable you will have to make your business worthy enough that someone will be interested in buying it. Since you are selling everything at the market value, you are not in a good position for driving negotiation and creditors have the right to claim the money obtained from asset.
5. Sell Business to Someone You Know
For SMEs another good option for exit strategy plan in Fort Worth, TXis to sell the business to someone you know. If your legacy to continue, you may sell the business to a family member. However, make sure that your personal relationships do not get destroyed because of the business dealings. If your business is crucial for the local community, then you may sell it to a local resident who believes in your dreams and aspires to take it to the pinnacle of success. When selling the business to someone you know, you should reveal information about the profitability of the business and the liabilities.
After putting in all of your efforts in a business, you may not want to sell it. However, thinking proactively and have anexit strategy plan in Fort Worth, TX ready beforehand will save you from the consequences of impetuous decision-making. At Kirksey Business Brokers, we ensure that you have a solid exit strategy plan whenever you want to sell your business.Our team of CPAs, lenders, attorneys, and business planners help in preparing a successful exit plans strategically so that you can focus on other prospects. Call us at 817-637-1508 to get more information and explore profitable possibilities.