A Complete Guide on A Business Exit Strategy

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A Complete Guide on A Business Exit Strategy

On January 27, 2024, Posted by , In Blog, With Comments Off on A Complete Guide on A Business Exit Strategy

A business exit strategy is a clear-cut roadmap for transitioning business ownership away from its current owners. The strategy includes selling a business, merging with another company, taking the company public via IPO, succession planning and much more.

The withdrawal of the existing owner is either to boost gains, reduce losses or ensure the business remains lucrative. Many entrepreneurs in Melbourne, Victoria create exit strategy to avoid potential losses or minimise their exposure to risks.

Thus, it is important to know the current value of your company by hiring business valuation professionals in Melbourne and create an exit strategy accordingly.

Here is a complete guide to help you make the right decision:

What is a Business Exit Strategy?

It is a plan to transfer or divest ownership of a company where the owner has no legal and financial interest. There are around five most common types of business exit strategies, such as liquidation, merger and acquisition, selling to mangers, IP and bankruptcy.

Keep in mind that each exit strategy has its own benefits and limitations. So, do a thorough research and study everything to make a well-informed decision.


Types of Business Exit Strategies

Here are five most crucial business exit strategies to look for:

1. Liquidation

In a liquidation exit strategy, the business owner sells all the assets and clears off all its debts before closing the business. This is one of the fastest and easiest exit strategies for small businesses.

Unfortunately, the ROI can be low for business owners as they can only generate money from the sale of business inventory and assets. The worst is that the amount generated through the sale of assets can be used to pay off to creditors before exiting.

2. Mergers and Acquisitions

This exit strategy includes either merging with another company or selling it to a larger investor.  You can work with a company that focuses on growth, development and innovation to help protect your legacy and take it to the new heights of success.

However, acquisitions can create problems if the working culture differs in both organisations. So, it is important to choose the company for merging or acquisition in Melbourne, Victoria.

3. Initial Public Offering or IPO

Many entrepreneurs in Australia dream of selling their business to the public for higher profits through IPO. It is one of the most ideal exit strategies for big businesses. As a business owner, you need to adhere to rules and regulations issue by IPO. It can improve the value of your business  in the business  market. You can also gather low-cost funds with ease.

Make sure you devote enough time, money and follow the set rules to get the most of IPO.

4. Selling a Business to managers / Employees

This can be possible if you find potential buyers within your organisation, like vendors, managers and employees. They already know the operations, market value, trends, culture and can handle the business with ease. You can transfer the ownership and let them run the business.

5. Bankruptcy

This is the last option when there is no earning potential in the future or the owners can’t repay its liabilities. Bankruptcy has no further business plans and it is the most unplanned and unwanted way to exit the business.

Thus, it is important to have proper insights about the value of your business through business valuation services in Melbourne and know the worth in the market.


The entrepreneurial world is full of delusions and uncertainty at every step. It is always good to create a proper and reliable business exit strategy and reduce the risk when exiting or transferring your ownership.

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