Many of the business plans we write for clients are used to secure tradional bank loans. But every now and then we write a plan for a company looking for investors or  money from VCs. In those plans, the exit strategy ( how investors will get their money back) is critcal.

If you are considering bringing investors into your business there are pros and cons. The influx of cash is a “pro” but  the loss of control is a “con”.

Ir you are going to go this route, be sure you define exit stratgegy before you finalize the deal.  Is this a temporary loan, or are you brining on a partner. Don’t wait till  you have chased the check to clarify roles, and timelines.

And from the investor perspective, think about how long you want to be involved with this business.

One of my favorite authors from the Harvard Business Review, Anthony (Tony) Tjan writing about exit strategies for investors in the stock market hit on a piece of advice I think is relevant for business owners and business investors.

He said: “Remember why you liked the investment in the first place.  “If you know why you bought a stock in the first place, you’ll automatically have a better idea of when to say goodbye to it. When you see core elements of a business or its market change, or when you can feel its customers getting tired, it is probably time to exit.”

Do you have a plan for your business exit?  Do you have a plan for your business?  Get started with our free business plan tool: