Exit Strategy

Running a business is about the now, the short term, the next client, next job, the plans for the next one, two, three years.

Rarely do we find a business that has a solid exit strategy.

Why Do I Need an Exit Strategy?

This normally comes into play when raising investment or seeking equity or angel finance. An investor is not in your business for the journey, they are in it to make a return and move on.

The most common question investors ask us is ‘what is the exit strategy’, the most common response we get is ‘the investment will be repaid in year x’. This is like a politicians answer, it avoids the question and doesn’t really add value.

An investor will not want just interest paid on their stake, they will want the dividend and payback, which normally comes from an exit.

What Might An Exit Be?

In every case it is different. If you are looking to grow and scale your business then consider whether listing on AIM is an option, or whether a trade sale to a competitor is possible. If you identify where your exit is then put some meat around it, identify who the competitor may be, identify how you would fit into their strategy etc.

I Don’t Want Investment, Do I Need An Exit Strategy?

The answer here is yes. At some stage you will become too old, bored, or simply want to enjoy life more rather than work all the hours available, so you will need an exit.

In this case how you exit will be very different, we will cover this in a future article about the differences between a business and a job. The key difference is you cannot sell a job.

More Info

For more detail about funding, business investment, equity investment, business angel finance or any other question you may have then please contact us here, or call on 01293 541333 and we will talk you through everything.

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