Exit Strategy in a Business Plan

… investors will get their return on investment by …

The final part of our business plan is the exit strategy section, this is simply a statement explaining how the investors will eventually realize their return on investment. Investors will always look to see what their exit strategy is before investing, some are prepared to wait a long time for their return, others have time restrictions placed on them by their own lenders.

All businesses have a life cycle, they start, grow, and mature, at which point a decision needs to be made about the direction the business will take. The exit strategy is an important part of the business plan, and to avoid costly mistakes and limited options in the future, the plan should be geared towards the exit strategy from the beginning.

Exit Strategy Presentation

There are numerous exit strategies, but the usual options include the following:

  • Acquisition by or merger with another business.
  • Stock market flotation
  • Sale to a third party
  • Liquidation and closure
  • Owner buyout

The example below gives a simple brief statement about the exit strategy options.

exit strategy
Exit Strategy (Click to enlarge)

This is the final part of the financial projections and Contents of a Business Plan Guide, a series of posts on what each section of a simple business plan should include.

Notes and Warning
The rules regarding the raising of finance from potential investors are complex and vary from country to country. Professional advice should always be taken before discussing or issuing a business plan.
Exit Strategy in a Business Plan October 5th, 2016Team

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