Originally posted on Apple News.
Why should small business owners and entrepreneurs be thinking about an exit strategy from day one?
According to Steve Forbes, 8 out 10 businesses don’t sell. The number one reason for that is because business owners don’t think about their exit strategy from day one. They don’t think about selling their business until an internal or external catastrophic event occurs, which inhibits them from maximizing value. You should always start your business with the end in mind! It enables to plan for you eventual sales when your business is thriving and allows you to tailer your business to your ideal (which will be one of the 5 types of buyers: (First-Time, Sophisticated, Strategic/Competitive, Private Equity Groups, and Turnaround Specialists). Not only can this increase the number of buyers that will be interested in your business, but it will also increase a buyer’s perceived value of your business.
The best way to plan your exit strategy is to follow the ST GPS Exit Model, a step-by-step step-by-step blueprint that will help you outline your exit strategy and reverse engineer it to ensure you exit your business at a maximum profit. The GPS Exit Model is as follows: Determine Your Destination (desired sales price), Know Your Current Location (current business value), Know Your Time Frame (when you wish to exit), Identify Who Your Buyers Will Be (which type of buyers will be willing to pay top dollar for your business), Determine Your WHY (why do you want to sell for your desired price)?
Written by Michelle Seiler Tucker, author of Exit Rich and founder of Seiler Tucker Incorporated.