The basic idea of most of the startups is focused on getting their product to market and solve the problems of their customers. The idea of selling a company is never the first priority of the business owner. However, it is important to keep in mind a Business Exit Strategy for a Startup. A planned business exit strategy helps the business owner to move out of the business at the right time smoothly. Every investor wants to see the startup go public or be acquired as an exit event. This allows the investor to gain back the funds invested at the beginning of the startup and gain some profit out of the investment made. Exit Strategy may be defined as: The method by which a business owner intends to get out of an investment that he or she has made in the past. In other words, it is a way of “cashing out” an investment. As per the experts, a startup needs to plan its exit strategy. There are many reasons to plan an exit strategy. These reasons include a planned exit, retirement, health problems etc. A well-designed business exit strategy increases the value of the business and helps in keeping the company focused on making returns. If the business model of a startup requires equity financing from angel investors, it becomes necessary for a startup to inform investors about the returns they can expect on their investment. Not having an exit strategy makes it difficult for investors to foresee a return for their investment. How to Plan a Business Exit Strategy In most of the cases while planning an exit strategy business owners take help from business consultants and legal advisors. However, it is beneficial if the business owner has a clear idea about his personal and business goals, and then assessing the financial readiness. This allows the company to plan an exit plan which aligns with the goals and financial readiness. It’s all about being clear about your business prospects and make the best possible decisions for the business at the time of an exit. There are numerous exit strategies that could be followed to move out of the business smoothly. Our Trending Post:Thing to keep in Mind before the Launch of Startup Company . Common Exit Strategies Some of the common business exit strategies applied by the business owners are as follows: Merger: A merger unites two existing companies into one new company. Most of the mergers take place to gain market share and expand the company’s reach. After the merger is done it becomes really important for the stakeholders to stick together as a team to gain profits. Initial Public Offering (IPO): Startups those who apply this exit strategy starts floating on a stock market and begins selling their shares to the public. This exit strategy is not for everyone, business conditions need to be just right to apply this strategy. Likes of NASDAQ, NYSE and Tokyo stock exchange have been the main markets for Startups looking for IPO. The Liquidation: This exit strategy is often overlooked which is to call it quits and simply close the business doors. Although, no one plans to liquidate his business while starting it. However, eventually, it happens all the time. This is a very easy and natural strategy as everything just comes to an end, so no more worries. The business owner doesn’t have to worry about the transfer of control. Selling to a known individual: This exit strategy need not be confused with Merger and Acquisition as it doesn't include the merger of two entities. You have to discuss your plans with your trusted ones and hand over the business to someone who could expand it in a more efficient manner. It is one of the common exit strategies applied by business owners Milking the Cow: Some startups are able to establish a solid business. Therefore there’s no need for them to sell their company to a bigger company. They can give good returns to their investors from their gains. When companies scale high the ladder of success, they will not want to exit but rather cash in on their products. Instead of an exit strategy, these startups aim at increasing sales. Acquihire: This is a special kind of business acquisition or exit strategy in which a company buys out business simply to acquire its talented employees. Such acquisition is great for employees as they get recognised for their hard work and talent. Bankruptcy: Although every business owner is wary of Bankruptcy, still sometimes things get terribly wrong. In this situation filing for bankruptcy protection is the only option left. It is an extreme form of business termination and it is important to involve an attorney as soon as possible. Acquisition: When one business buys another business, it is called an acquisition. Businesses buy other businesses to expand their market or to get rid of the competition. For example when Pepsi was considering acquiring Sobe the main aim was to kill competition. The acquisition is one of the most common exit strategy applied by businesses. This strategy gets even more fruitful when multiple acquires are in a bidding war to acquire a company. Conclusion A good business owner is the one who keeps the prospects in mind while performing in the present. For a company, success means to be ready for any possible situation that lies ahead. It’s not enough to build a business worth fortune, along with it a perfect business exit strategy is a must. Planning a business exit strategy doesn’t always mean disaster or failure. Many entrepreneurs start their business with a clear idea of exiting the business at a certain point of time. A perfect exit strategy helps the business owner to make the process of exiting the business more smooth and easy without any implications. However, it has been estimated that 75 per cent of small businesses do not sell, so a company must always market in a way that maximises its value in the eyes of a buyer. Also, Read: Essentials any Marketing Strategy should include in 2019.