Regardless of your future plan for your business, whether that may be selling or passing it down, you need a valuation to achieve your exit goals. To start analyzing your business’ worth, look at your total revenue, pretax income, accounts receivable and payable, loans, and rent or mortgage payments.
Once you have figured out your valuation, it’s time to start planning your exit.
There are a few ways to figure out your perfect exit plan and a few different options. Here are the types of exit to consider, and what they may mean for your company:
- Liquidation and closing your doors: This may be a tough decision to make, especially if you have built your company from the ground up, but sometimes this can be the best option to retire from work and continue living your life the way you want to!
- Sell: Another great option if you want to move on from your company is to sell to another individual. Ensure that the person you are selling to will continue to run your business with the original values in mind and always has the best interest of the company in mind.
- IPO (Initial Public Offering): This option can be more difficult for startups but could also be an option if you decide that it’s the best option for your company.
- Merger and Acquisition: This option can be beneficial for small businesses who want to grow their business. If you merge with a similar company or sell to a company that is similar to yours, it will increase your reach and, in turn, increase your revenue.
- Passive Income: You can pass the responsibilities of running your company to someone else, as you enjoy an ongoing revenue stream. You keep your ownership and receive annuities while letting someone else take the workload off of your plate.
If you prepare your business for an exit at the beginning of creating your company will set you up for success as you move forward. There are various options and routes you can take, and it may seem overwhelming at first. At TGG, we want to help make exit planning easy, contact us to schedule your 15-minute evaluation today!