An entrepreneur starting a business must have a clear vision, goals and game plan as to where the enterprise is heading. To maximize the return out of the business, the entrepreneur must have a carefully planned exit strategy. Most successful entrepreneurs have an understanding of when to exit out of a business. If one does not plan the exit strategy carefully, the problems that one might have to face are:
- Not able to maximize the value: If the entrepreneur is not able to guide the business towards the planned option, it could cost the entrepreneur in the form of not able to maximize the value from the business.
- There could be trouble in finding a successor. Generally, Asian countries are not good at grooming the successor, partially due to the orientation of most family businesses or lack of understanding among family members.
Exit strategy in Singapore can be categorized into:
The family succession plan must recognize and accommodate the needs, goals and objectives of each family member. The family's goals and objectives then become the basic building blocks for the development of the succession plan for the family's business.
Some businesses are meant to be bought out by bigger companies and some are meant to go further to become bigger companies themselves. The real reason could be growth and possible business. One should try to exit at a high when the business is doing well and the market condition allows to maximize profits.
Terminating a Business
A business may cease operations for many reasons and in a number of ways. When a business is terminated or its legal status changes, there are licensing and regulation requirements that must be met. There are also opportunities for improving the economic prospects at termination for owners and creditors through legal provisions of state and federal laws.