• Different business exit strategies also offer business owners different levels of liquidity.

  • Selling ownership through a strategic acquisition, for example, can offer the greatest amount of liquidity in the shortest time frame, depending on how the acquisition is structured.

  • The appeal of an exit strategy will depend on market conditions, as well; for example, an IPO may not be the best exit strategy during a recession, and a management buyout may not be attractive to a buyer when interest rates are high. 

  •  When Are Exit Strategies Used? An exit plan may be used to:

  •  Close a non-profitable business

  •  Execute an investment or business venture when profit objectives are met

  • Close a business in the event of a significant change in market conditions

  • Sell an investment or a company 

  •  Importance of an Exit Plan:  It may seem counter-intuitive for a business owner to develop exit strategies.