If you are a business owner, what is your exit strategy?

1. What’s Your Exit Strategy?
Wray Rives CPA CGMA
www.NeedaCPA.com

2. Lifestyle Company
Minimal investment in growth
Big take home pay for owner
Live on the income
Autopilot operations
www.NeedaCPA.com

3. Exit Strategy-Just Close It
• Pros
• Easy
• Low stress
• No negotiations
• No transfer of control
• Cons
• Leave money on the table
• Post ownership finances
• Reputation takes a hit
www.NeedaCPA.com

4. Exit Strategy-Sell To The Kids
• Pros
• Comfort level
• Little to no due diligence
• More likely to preserve your legacy
• Cons
• Could still leave money on the table
• Transfer of control can be complicated
• Can challenge family dynamics
www.NeedaCPA.com

5. Exit Strategy-Sell To A Friendly Buyer
• Pros
• Comfort level
• Less due diligence
• More likely to maintain status quo
• Commitment to make it work
• Cons
• Still leaves money on the table
• Could end a friendship when they find your skeletons
www.NeedaCPA.com

6. Exit Strategy-The Acquisition
• Pros
• Bigger payday
• Strategic buyers may pay more than it’s worth
• Cons
• Cultures clash in merged companies
• Acquisitions are scary
• Acquisitions are messy
• Acquisitions are costly
www.NeedaCPA.com

7. Exit Strategy-The IPO
• Pros
• Biggest payday when it works
• You might get to ring the bell at the New York Stock Exchange
• Cons
• Only a very small number of IPO’s succeed
• It takes time (5-8 years)
• You will give up a lot of control
• You need to be a grown-up company from day one
• VC’s and investment bankers get their share of the pie
www.NeedaCPA.com