Starting a business? Get quality information on how to start up and manage your business efficiently and effectively. Discover the entrepreneur in you! Visit http:/www.business-plan.co.za for more

1. Exit strategy for your business plan
Exit Strategy For the best insights
on Business Plan
for your Development, finding
good investors click
business plan here

2. Exit strategy for your business plan
Now that you have thought your business plan out and
are itching to get started it is the perfect time to verify
your business model against realistic exit strategy. Yes,
you should think about the happy end before you start
your race. And that is especially true if you plan attracting
outside investors to you project. The exit strategy
presents the way investors pull out their investment from
your business at the end of the day. And it is not the
payback period they are interested in: investors are only
willing to risk their monies if they do earn profits (and the
higher the multiplier is the better). In most cases the
small paragraph about exit strategy in your business plan
attracts more eyeballs then your sales projections.
Moreover, your entire business model depends on how
you plan to cash out.
There are 4 major types of business exit strategy:

3. Exit strategy for your business plan
1. IPO
This is definitely the sexiest way to have your exit party,
but only a few out of millions of companies actually strike
that high. IPO’s do attract a lot of media attention and
that is probably how you started to consider this option.
But it takes years to build a company, which can go public
and then years (and millions of dollars) to actually prepare
it to Initial Public Offering (IPO). You’ll have to restructure
your accounting procedures, reorganize your management
system (which sometimes requires hiring professional top
managers instead of you, the founder) and make a
fabulous IPO road show, to convince analysts and stock
investors that your company is worth their money. And
even then you can still find yourself in the situation when
your share in the company has been diluted by the joint
efforts of your fellow investors.
IPO is more like the highest target for your company than
a realistic business plan exit strategy. So make sure you
provide additional options for your investors.

4. Exit strategy for your business plan
2. Business Acquisition
If you plan selling a business to cash out, you should
focus on building a transparent and sustainable company.
To be successfully acquired a company should be of
optimal size (not too big, not too small), live comfortably
in its market niche, have a well-trained team of managers
and specialists and established relationships with key
suppliers. But what is usually in the heart of most
acquisitions is the product (or the technology). So in your
business plan developing a winning product concept,
taking over some specific market or creating a technology
that a larger company can benefit from should be
particularly stressed.
And also prove that you’ll be able to sell your company
when the time strikes: list similar acquisitions that have
recently been conducted and/or the list of potential
buyers, which could be interested in your company.

5. Exit strategy for your business plan
3. Business Merger
Usually merger and acquisition go hand in hand: if the
business you are to build can complement existing large
companies it is an acquisition; if it can make a perfect
match with a company equal in size, it is a merger.
So if you plan merging with a specific company, make
sure that your entire business plan follows the logic of
such exit strategy. Outlining the companies potentially
interested in merger is also important to make this exit
strategy look feasible.
4. Business Buyout
Sometimes entrepreneurs do build companies for
themselves. So if you are the case, you might feel
emotionally attached to your business concept or you plan
devoting your life to building a great company from
scratch. And though you might need some additional
investment to launch or lift up the business, you’d like to
regain control over your company afterwards.

6. Exit strategy for your business plan
So make your exit strategy clearly stated in your business
plan and provide estimations of when will you buyout the
share from your investors and at which price (interest
rate). Normally the interest rate depends on the risk level:
the higher the risks of loss the higher the interest rates
are. You should also outline the level of control investors
will get while participating in your project (if any) and the
opportunity for them to preserve minor shares in your
business after the buyout.
So the general rule with business plan exit strategies is
that they should repeat the logic of your entire business
model, be feasible and realistic.
For the best insights on Business Plan Development,
finding good investors click here