From the course: The 45-Minute Business Plan

Define your exit strategy

From the course: The 45-Minute Business Plan

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Define your exit strategy

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- Finally, in the Strategies & Implementation segment, you'll want to include an exit strategy. In my experience, this is one that's really hard for people to address, as no one wants to plan to exit the business. But keep in mind, this does not always mean closure, although you still want to address that as well. This could mean you plan to grow and sell the business, so speak to that. However, at a minimum, you'll want to show that you have planned for contingencies. This will be roughly four to five paragraphs about how you will handle any turbulence the business may have in the face of potential closure. The goal of this is to show how you plan to ensure the investors will receive the return of their investment, regardless of the success or failure of the business. For example, you may say something like this. "It is the intent of the current owners to continue to operate ABC LLC for the next 50 years, unless a viable offer is made by a third party to purchase the company, or the current owners decide to retire and the ownership transfer of the business has been agreed upon by all. However, if at any time in the future ABC LLC cannot continue to successfully operate, or if the owners are unable to fulfill the demands and responsibilities of their positions within the company, all open transactions will be fulfilled, and then measures will be taken to close the business with minimal impact to any individual. The definition of successful operation and timeframe in which to achieve specific objectives and milestones to remain in successful operation will be predetermined, and the evaluation will be an ongoing process." Keep in mind that you will want to also address how the liability is measured, and how you plan to sell assets to offset debts. Take your time to really think about how you would want to be paid back if you were investing in this business.

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