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What are some common business exit strategies?

Building a business from the ground up is a dream for many Moorestown entrepreneurs. Whether it takes months or years to cultivate a thriving business, the day may come when a business owner wishes to sell his or her business and move on to other ventures. When that day comes, it is important to keep in mind the various exit strategies that may be an option for selling a business.

One common way to sell a business is through a merger and acquisition. In a merger and acquisition, the business owner either joins together their business with a similar one, or they are bought out by a bigger business. In general, mergers and acquisitions are beneficial to both businesses involved. It offers them a means to save resources and generate revenue without having to create an entirely new product.

Another way to sell a business is through an initial public offering. While this was, at one time, a very popular choice, as it usually gave the business owner a financial boon, after the Internet bubble burst, it has become less popular. Moreover, shareholders in a business may have demands, and there is always the issue of liability.

A third way to sell a business is to sell to a friendly buyer. Unlike a merger or acquisition, which joins two businesses as one, this is simply a sale of the business to another entity. It is a good way for a business owner to obtain the revenue needed to repay investors and still have some money left over.

Finally, for some business owners, the best decision is to liquidate the business and close it down. It is a simple method for exiting a business, especially if something catastrophic happens or the market tanks. If done properly, a person can close down his or her business and liquidate its assets while still coming out on top.

As you can see, there are a variety of ways in which a business owner who is ready to move on can exit their business. But, business sales can be complex affairs. Due diligence must be performed when it comes to buying or selling a business, and depending on the business type, there may be legal formalities that must be met. Therefore, if a business owner in Mooresetown is considering selling, it may help to consult with an attorney.

Source: Business Insider, "Five Smart Exit Strategies," Martin Zwilling, Jan. 5, 2011

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