Exit Strategies
There may be a variety of reasons why you leave your company. They include retirement, disability, being a serial entrepreneur (selling this company to start another one), or death. Whatever the reason, there are several exit strategies.
Before you make any plans, it is a good idea to determine what the business is worth now (the value may change in the future, but plans can be adapted to accommodate valuation shifts). This is done by obtaining a business appraisal. There are various formulas used to determine the value of a business:
- Asset and earnings valuations (factoring in intangibles such as goodwill)
- Asset-based formulas (based on book value or liquidation value)
- Comparable sales of similar businesses
- Earnings (revenue) formulas (multiples of revenue or capitalization of earnings)
Resources to help you find a qualified appraiser (someone with the requisite professional experience who meets certain standards) include the following:
- American Institute of CPAs—Accreditation in Business Valuation (http://apps.aicpa.org/credentialsrefweb/ABVCredentialSearchPage.aspx)
- American Society of Appraisers (www.appraisers.org/BVhome.aspx)
- Institute of Business Appraisers (www.go-iba.org)
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