If you want to make money selling your business, you should at least understand the basics. Therefore: what is an exit strategy? And how do you ensure a good exit strategy?
Definition exit strategy
An exit strategy is the way in which you say goodbye to your company, with the aim of achieving the highest possible return.
You can make an exit by, for example, selling your shares or part of them.
Another exit strategy is a merger with another business, or even a complete takeover by another company or Venture Capitalist. A Management Buy-In is also an option that allows you as an entrepreneur to take a step back. In short, there are several options.
Why an exit?
There are several reasons to make an exit. When you're ready for a new step, for example. Or if you want to retire or if the cake is just finished.
Disappointing results can also be a reason to sell. Then the goal is to limit the losses. But you can also make an exit if you want to sell your company with as much profit as possible.
Does this work? Then we speak of one Dream Exit.
To make a good exit, you need a solid exit strategy.
Two important factors for a dream exit
Being for a good exit two factors very important: your turnover and the complexity of your company.
In the best case you have a recurring turnover. This means that you have to deal with subscriptions or licenses, for example. Your turnover then returns monthly, and in the best case scenario, this recurring turnover also grows every month.
In addition to the recurring turnover, the complexity of your company also plays a role: if it is low, you have hit the jackpot.
Low complexity means that your company does not (need) these things: complex logistics processes, hardware-related limitations or specific highly trained personnel.
Do you have a recurring turnover, but a highly complex company? In principle, that is not a problem either. That means that you are in a niche, and that can certainly be appreciated.
Do you have no recurring turnover and is your company complex? Then you may need to take a closer look at your business model.
Chances are then that you will not be able to set up a good exit strategy, simply because no one wants your company.