Strategies for Exiting Your Business

Research methods

The research method that was used to collect data for analysis and discussion is secondary qualitative research. This data was collated from a range of journals, all of which were addressing a different touchpoint of exit strategies. The aim of seeking for information across different platforms was to identify joining factors as well as identify any patterns in approaching exit strategies. Therefore, the review and analysis have been carried out on existing literature, including literature that offers comparisons of exit strategy situations in different countries.

The data collected was non-numeric. The journals and other content sources that were referred to were based on small studies that offer insight into a business or section of industry. For this reason, this paper focuses on analysis of their conclusions, more so than their data sets. This allows for deductive reason, though may also be viewed as a practical limitation. Furthermore, this paper attempts to understand cultural nuances that may impact the exit strategy process, as explored through the literature studies.

The analysis focuses on the meaning of exit strategies, both for the business owner and the investors. Through research analysis, it became clear that from end to end, exit strategies begin with the owner and culminate with the potential effect on the investors. By seeking to analyze this process, this paper seeks to understand the implications of choosing one specific strategy, as well as how to ensure that the strategy is carried out from start to finish. The secondary qualitative research is interpretive in nature, as this paper offers exploration into the topic building on theoretic principles that are in existence within the literature.

Discussion

The research reveals that there are positive reasons for an exit strategy, and that this strategy should form a core component of any business documentation. The exit strategy guides decision making, both for the next generation owner and the exiting business owner. This means that it acts as a blueprint for what actions should be taken in the event that an exit is imminent. With this blueprint, it becomes easier to determine the factors that can affect any exit strategy including the time needed, intention and business objectives for the business. Furthermore, there are numerous courses of action that a business owner can take following the strategy that include being available for consultation within the business, or a full exit meaning the business and its operations are totally in new hands.

For the new owner, it touches on how they can ensure a return on the investment that they make with the business. By the business owner understanding the goal of the investor, the exit strategy can ensure that the business operations are competent and aligned to a certain exit strategy that is most likely. Money, or a return on investment is also essential for the business owner, and this may guide the number of months or years that the business owner works through making their exit.

Therefore, there are ongoing actions that the business owner needs to ensure take place, both for them and the investor. These including profit monitoring, staying legally compliant and setting up contracts with suppliers and stakeholders. From the literature, it becomes clear that ensuring these actions are in place will result in the right exit strategy being chosen.