Selling your Maple Grove small business is never an easy decision. Creating, organizing, and implementing an exit strategy can help with the complex transition from small business owner to small business seller. Being aware of the ripple effects from the sale can help minimize how your employees, customers, family, and potential buyers are affected. Let’s take a look at some types of exit strategies and how they can make transitioning your Maple Grove small business a much smoother process.
Before you can implement an exit strategy, it’s important to know what an exit strategy is. An exit strategy is ultimately a plan that will allow a small business owner or group of investors to wash their hands and step away from the business. Depending on your ultimate goals, there are a variety of ways a Minneapolis small business can implement an exit strategy.
A small business owner may want to completely sell his or her small business. Their exit strategy would consist of a full sale between two parties. One of the biggest hurdles for this type of exit strategy is finalizing and agreeing on a sale price for the business. In order to have the most well-rounded number for selling the business, it’s important to have multiple appraisals to understand the value of the entity.
Merging with another small business is another viable exit strategy. Depending on the type of industry your business is in, merging with another company to create a larger entity could be a feasible strategy. The combining of two companies may not result in immediate monetary compensation, but could produce dividends in the long run.
If your small business is still thriving, but you are ready to reduce your role in its day-to-day operations, you may want to hand it off to a family member. Keeping your small business “in the family” would be a great way to still have a voice in the business, but not the heavy load of its day-to-day operations. It’s important to remember that, when dealing with family, there is a different set of feelings and emotions that may come into play.
Another example of an exit strategy would be to liquidate all assets and lock the doors. While this is quite a drastic plan, it may work for your small business. Again, depending on what type of industry your small business is in, you may have rather valuable assets to sell off. One of the biggest hang-ups of a liquidation exit strategy would be finding individual buyers for each piece of equipment or furniture your business owns.
When the time comes for you to craft an exit strategy for the Maple Grove small business, it’s important to think about all of the options. Being meticulous and organized when creating your exit strategy can mean the difference between a graceful exit and not. If you’re curious about creating an exit strategy or would like some guidance with the process, the CPA team at BWK can help. Feel free to contact us with your questions.