Just few years ago the word “Exit” had a pretty bad connotation to small business owners. Still does really, just not as bad. The worst of the interpretations is leaving the building feet first. To some it now connects with selling their business. I would suppose that is the most common use of the term, but is it the only one?
There are many ways you can exit a business. Some really aren’t an “exit”, at least in the total sense. Obviously, you could sell to a third party or internal buyer (think manager or existing partner). If possible, and quite frankly if sensible, there could be a generational transfer (more on that another day…). There are also exits that are partial or some type of combination. Your company may be candidate for an ESOP or a PE buy out. Each could allow your exit to occur over time, each with its own challenges and ramifications on the business and you as the owner. Perhaps you can phase out of operations and take more of an investor or chairman position. If big enough, maybe even an IPO. Any of these choices I would consider planned exits. In other words, you can deliberately plan, design, and run your company for the desired exit method.
What about the unplanned kind of exit? Some are more pleasant than others. Certainly, an unsolicited offer beats out any of the “dismal D’s” of death, divorce, disability, and dispute. All owners should be planning for the bad ones. Really it is planning against. That planning should be focused on guarding against them and making sure your company can carry on through any one of those events. On the good side of the unexpected, the strategic offer, you can be ready for that by planning for your future exit. By that, I mean if you are planning to sell your business in the future and you truly run it that way you will be ready to consider, and survive, that unexpected offer.
While not always reality, any owner should be able to choose the “exit” right and desirable for them. That proactive plan would allow for you to take advantage of the best type of exit for you at the best time.