When starting a business the first thing you should do is consider your life goals and objectives. As a part of this consideration you need to dial in what you ultimately want from your business. This is referred to as an Exit Strategy.
Here are some possible exits:
- Sell your business to a competitor or another company that wants to enter your space
- Take your company public (IPO)
- Sell your business to another entrepreneur
- Sell your business to your partner
- Sell it to your employees
- Keep it as a lifestyle or cashflow business until you keel over
Give this some thought if you haven't already. Knowing how you want to exit the business will help shape many of the decisions you make early on. For example, it will largely determine how your accountant structures your financial statements and how much EBITA you show. Your exit may also shape what entity you use to set up your business, such as an LLC versus a C-corp. It may also influence operating decisions, such as strategic partners, distribution channels, etc.
Additionally, if you have partners (partner = headache) then it is increasingly important that you have alignmnet on how and when you both want to exit the business.
mmmm...coffee...
Does anyone have a story about how they exited their business?
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