Exiting your business is one of the most important decisions a business owner can make. With so much conflicting information online, it can be difficult to know what exit strategy to take. Every strategy has its pros and cons, but only one will work for you. Continue reading to learn more about the pros and cons of different exit strategies.

Selling to a Partner/Investor

Business owners can exit their company by selling their stake to a partner or investor. Due to their knowledge of the business, your transition is more likely to be smooth. However, this exit strategy requires the right recipe for success. If there isn’t a partner or investor willing to purchase your stake, you would have to look elsewhere. Additionally, selling to a buyer you know often results in a lower, more accommodating sale price that may not match

Family Succession

It’s common not to want to let go of your business fully, so why not keep it in the family? If a family member works within the company, has skills related to your business, or generally has the capacity to be a great leader, they would be a potential fit. However, much like selling to a partner, this exit strategy only works if the family member wants to become a business owner. Similarly, you may find yourself selling for a lower price to accommodate their wallets.

Management and/or Employee Buyout

Management and Employee Buyouts (MEBO) is a corporate restructuring method that can be used as an exit strategy. However, this exit strategy can’t be executed on a whim. The correct planning must be done; company culture, efficiency, and financials need to be assessed. Like the other exit strategies we’ve covered, a sale can’t take place without the proper buyer. However, unlike the previously mentioned exit strategies, management and employee buyout structures can be altered to a management buyout or employee buyout method.

Mergers and Acquisitions

M&A has a reputation for being only an exit strategy, but that is far from the truth. The mergers and acquisitions journey should start at least three years before the business owner’s intended sale date. Mergers and acquisitions aren’t just about selling a business; it’s about preparing a business to be the best it can possibly be before it goes to market. Over the course of a business owner’s 1000-day journey, a team of professionals focuses on auditing financials, diversifying revenue streams, and overall making the business more appealing, while searching for potential buyers that would be a good fit for the company.

There are many different exit options, but only one is right for your business. Whether you’re unsure of where to turn or you’re interested in mergers and acquisitions, contact Stony Hill Advisors today to find out what’s best for you. Let’s work together.