How Exit Strategy Improves Small Business Organization, Processes & InvestmentBy James Blake on
Many small business owners and entrepreneurs starting a business dream of selling a company or achieving other exit strategies through merger and acquisition or business succession planning with a family business. A small business attorney can provide invaluable advice for business entity organization, structuring business operations, and intellectual property development strategy that can dramatically improve your exit strategies.
Importantly, the reverse is also true: a well-defined business plan and exit strategy brings invaluable improvements to your small business organization, product and intellectual property development strategy, and business operations while you are still building your business. These improvements will help you run a better company and improve your long-term business growth.
Exit Strategy Brings Focus to Small Business Operations
Exit strategy helps a small business owner focus on value-creation. Small business owners and entrepreneurs starting a business are bombarded with new ideas for business processes, products, features, services, etc. Organizing a business entity, business operations, and intellectual property development around exit strategy helps a small business avoid actions that conflict with your value-creation mission.
Further, your business plan and exit strategy provide useful, goal-oriented metrics to evaluate the success of your small business and the execution of your business plan. If you don’t define and re-evaluate your exit strategies at the beginning and throughout the course of operating your business, you’ll have a hard time determining whether you’re on the road to success and determining what course of action is best for your business.
Exit Strategy Attracts Investors & Financing
A defined business plan and exit strategy is critical to attract investment capital. Angel investors and venture capitalists are different in important respects, but they generally share at least one common interest – a drive to see a return on investment (ROI) for their contribution to your company.
Without a defined business plan, marketing plan, intellectual property development plan, and exit strategy, it may be difficult to convince investors that your company deserves their confidence and capital. But if you have made such plans and executed on those plans, you’ll not only be better prepared to convince them to invest in your business, you will also be able to negotiate better terms for financing or investor capital.
Successful small business owners and smart entrepreneurs starting a new business know that maximizing small business valuation when selling a business requires commitment to a business plan and exit strategies. Our Austin business law firm regularly advises exit strategy, business asset sales, business succession planning, and clients selling a business.