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Exit Plan

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Submitted By mailmeaniket
Words 1520
Pages 7
Feed It to the Chipper
In the worst case, the company will be broken into pieces and fed to the liquidators as so much chum. This path is dictated by poor financial performance, lack of a viable market for either the company or its products or the impatience of the investors to continue funding a dry hole.
Owner Buyout
In many cases, the founder or the employees will have an intense desire to keep their jobs. This scenario assumes a well-performing company that is generating positive cash flow and profits. An agreement is struck with the investors, stockholders or lien holders establishing the value of the company. The employee group will find a way to finance the amount necessary to buy out the interest of the others, thus taking control of the company away from potentially hostile forces.
Related Reading: Exit Strategies for a Business
Sell the Company
This exit strategy is just as it seems. From inception, you build sales and brand value to get the attention of potential suitors. You may have predetermined a level of profit at which you begin to market the company. You may have done such a good job of building a brand that a competitor or conglomerate will see your company as a good fit to its long-term strategy. This option often results in dismissal of most management in the target company and some consolidation in the ranks.
Go Public
The most complex exit strategy is jumping into the morass of regulations managed by the Securities and Exchange Commission. The Sarbanes-Oxley Bill made the process of selling all or part of a company to the public through the issuance of stock a challenging proposition. The regulations will keep your lawyers happy for years to come. If you plan to use this option, you must start the planning process almost from inception due to the stringent recordkeeping necessary.
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