How to Write an Exit Strategy for Your Business

Exit strategy is a predetermined objective which is employed by a businessman who is planning to transfer his business responsibilities to another person, for various reasons. This article will help you to know how to write an exit strategy.
Exit strategy should be planned, keeping in mind the long and short-term objectives of the company owner. It should be considered and developed right from the beginning, once you have finalized with your long-term and short-term goals. Keeping the expectations according to your business, and planning the strategy will be helpful. Before you plan the exit strategy, it is required to concentrate on strategic planning, organizational planning, and financial planning of the company. The three important questions which you must address to yourself about your business before writing the plan are: to whom, by when, and for how much.

Writing the Exit Strategy

Choose the Best Exit Strategy for your Business

• Selling the business to a family member.
• Selling the business to other company, which is usually larger than yours (acquisition and merger).
• Selling the business to Employee Stock Ownership Plan (ESOP), in which the stocks of the company is sold to the employees of the company itself.
• Initial Public offering (IPO) is a risky strategy in which the stocks of the company are sold to the public. The investors need to take a risk because the traders get in (buy stocks) and out (sell stocks) and may cause a financial swing.

If none of the plan works out, the business owner may have to resort to liquidation.

Write Down the Questionnaire Document

• How much investable assets should I have in my account?
• What would be the tax impact on the amount that I would receive after I quit?
• What are the legal agreements that I should sign before I complete the disposal?
• Does my business have the required opportunities and value from the view of the buyer?
• How can I clear my debts, successfully?

Financing your Business

Choosing the source of capital is very important, as it will directly influence your decision to exit. The objective of choosing your financing is not only about increasing the funds, but it also concerns the cost of both money and relationships, if you are borrowing the money from your family or friends.

Dealing with the Taxing and Other Legal Issues

Discuss the legal and tax related issues with an experienced corporate attorney and other business accounting professionals. Some of the legal and tax issues that you must discuss with your advisors are listed below:

Legal Issues

• Liability of Owners, officers and directors
• State and federal security laws
• Rights of minority owners
• Cost of transfer of ownership
• Buy-sell agreements with shareholders and partners

Tax Issues

• Capital gains upon transfer or sale of the business
• Corporate and personal taxes
• Properties owned
• Reasonable compensation limits
• Retirement plans
• Income tax
• Capital Gains Tax (CGT) tax

Actions that Should be Implemented Before Exiting

Begin the planning and the implementations, once you have set the timeline. Implement the following actions before finalizing the agreements and the complete disposal.

• Train the new managers.
• Start your debt reduction program.
• Update your business plan.
• Dispose the loss-making subsidiaries and surplus machinery.
• Approach venture capital backing for MBO (Management Buyouts).
• Discuss the propositions with the concerned bank management.
• Appoint lead adviser.
• Conduct environmental audit.
• Reduce the stock levels of your company.
• Review personal financial positions.
• Undertake mock due diligence.
• Most importantly, plan the activities to get engaged after your exit from the business.

Planning out your exit strategy at the last minute will never be helpful, because, all the factors required for your successful exit will not fall in line. Also, finding out a buyer in a short period and disposing the assets quickly will not fetch you the desired profits. So, planning ahead is necessary. By Suganya Sukumar




From:

http://www.buzzle.com/articles/how-to-write-an-exit-strategy-for-your-business.html

Convert your Arts and Crafts Hobby into a Business

Hobbies like arts and crafts offer a good business opportunity for those who really like spending their time creating artwork or unique craft items. With a little investment and some information on how to start an arts and crafts business, you will soon be ready to start selling your products successfully...

Each of us has a hobby, engaging in which gives us a feeling of satisfaction. Arts and crafts are a favorite hobby of many people, which also offers a lot to explore. This hobby can be and is often converted into a business that has low risk, low investment and can give a good amount of profit. Many experts recommend this idea to beginners and those looking for small business opportunities to increase their total monthly income. So, if you are starting an arts and crafts business, then here are some things to consider before you start it, and ways to work it out well.

Things to Consider Before Start-Up

If you have never been part of a business, the points given below will tell you how to start an arts and crafts business successfully.

* You need to plan the business well to avoid any situations where the investment cost is more than the profit earned, the order is delayed, or the customer is not satisfied.
* Start reading about the basics of small business management, to convert your arts and crafts hobby into a successful business.
* From the wide range of arts and crafts, you need to decide which type of products you will be selling.
* Make a list of easy crafts to make and sell and find out which items have the maximum demand among your target customers.
* In order to make your business score more among your competitors, try to have a set of products not sold by others.
* When you start planning when and how to start an arts and crafts business, you need to have a certain amount of money for the initial expenses, which mainly includes the cost of raw material.
* Open a separate bank account for your business. This will separate the entire cost and profit details from your personal account and let you know the exact numbers.

Starting Your Arts and Crafts Business

You can have the business setup right in your house or backyard. This is one of the advantages of turning your arts and crafts hobby into a business. When you start your business, the first step is letting people know about the same. Start with your friends and neighbors. Moreover, you can look for simple and low-cost ideas to advertise your business. This includes paper posters and small pamphlets. Photographs of ready artwork and craft items work best in this case. You can e-mail these to your friends, add them to your social networking profiles and post them on free classified advertisement websites.

Finding a market to buy the raw material is a very important part of this business. You need to browse through online websites, nearby stores and wholesale dealers to find good shops selling the basic material required for making arts and crafts at the cheapest rates.

Remember that you might not achieve sales that will level your investment cost, for a few months at least. Hence, you must expect 'no profit' for the first few months, until your business is set-up well, marketed properly, and gains popularity.

Dedicating enough time for your business is very essential, at least in the initial stage. Even if you are a working individual, make a time-table to distribute your tasks properly through the day, week and month, hence, avoiding any problems and meeting deadlines.

Taking Your Business to The Next Level

Once people are aware of your business and you have started getting enough orders to meet the production cost, it is time to take your business to the next level. Well, that is not as difficult as you might think! Promoting your products and increasing the variety of products you sell, is a good way to attract more consumers. You can contact shops which sell artwork and craft items and sell your products to them instead of finding direct customers.

You can also have an exhibition-cum-sale of your products, say once in 3 or 6 months. Put up your items for sale on online shopping websites to attract more customers with minimum efforts. Taking good photographs of your work is very essential for this step.

Well, there are no really any strict rules to be followed while turning your hobby into a business. All you need is planning, dedication towards your work, good communication skills, and ideas to grow your consumer base. Explore areas that are not common and give importance to each part and step while you set-up your arts and crafts business.
By Mamta Mule
Published: 11/16/2011

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