Does your company need an exit strategy? There are many reasons why you should consider adding it to your company strategy and here are some of the main ones from Yair Hamami:
- Increase value
The problem is that owners of companies often don’t think of their company as something that’s sellable. That could be why they don’t include an exit strategy in their company strategy. The problem with this approach is that it can catch them off guard.
Let’s say that something goes wrong even though the business’ owner has put in a lot of time, effort, and money into the company. For whatever reason sometimes they’re required to sell the company, for example.
In that case, it’s time to start thinking about the company as an asset. However, it’s important to make plans for this even in an exit strategy. That will help to make sure your company is taken care of when you’re not there.
- Plan for the unexpected
This is one of the main reasons to add an exit strategy to your company’s company strategy. When people launch a business they usually don’t consider the fact that one day the company might have financial problems.
Keep in mind that there are other situations that can happen. You might retire early because the company has succeeded. In that case, it’s still important to have an exit strategy. It will help to make sure that your company is taken care of well when you leave.
On the other hand, if you don’t plan for the future then your company can literally go into chaos. That’s due to various factors including office politics that results in power struggles.
- Train a successor
It’s important to make sure that the right person takes over your business when you leave. That’s why an exit strategy in the company strategy is important. You might already know who you want to run the business, such as a family member or company executive.
That said, you’ll likely want the person to run the company in a certain way. That involves various issues including decision-making. You can solve the problem by including an exit strategy in your company strategy. That will help to make sure that there’s a plan to train your successor.
- Smooth transition
When you leave the company you’ll want the transition to be as smooth as possible. There are various ways you can assure that, but one of the best ones is to have a strategic plan. The reason is you can include guidelines about how you want the company to be run, for example.
This is one of the main reasons why you should add an exit plan to your company strategy. You’ll want the transition to be as smooth as possible regardless of who takes over the company.
- Protects your investments
You’ve put in a lot of time and effort in your company. It’s important to make sure that those investments are protected. One way to do that is by creating an exit plan. It will help to make sure that your investment is safe.