**2.2 The business owner and exit strategy**

Businesses differ in terms of their size and operations, which means there are different factors business owners will consider for an exit strategy. The key elements that will affect the type of exit strategy chosen include the following: -.

• Time Frame

The exit strategy needs to be guided in terms of when it will take effect. Although not set in stone, it enables the business owner to negotiate where necessary and also ensures that adequate time is taken for a smooth transition. This information is especially important for the next generation investing in the business, who want to understand how long their investment will be giving them a return, and what factors could affect that return [3].

• Business Intention

As part of the exit strategy, it should be understood whether the business operations are meant to continue, or if the business will be dissolved to make way for a new entity. Understanding this will ensure that the successor of the business meets the intention and overall goal. This also gives all stakeholders an understanding of what to expect in the event of an exit.

• Business Objectives

The business owner needs to evaluate the objectives for starting the business and their individual goals. With these in mind, during the process of exit, it becomes clear if particular business objectives are a priority.

• Triggers

The business owner needs to understand triggers to determine what could happen to cause an exit or any conditions which may preclude an exit. This way, it will be clear what response should be taken.

• Next course of action

The business owner needs to clearly define what their intentions are after they exit the business. If they plan to open up a new business that provides the same product or services, a non-compete clause may be necessary for the exit strategy agreement. If the intention is to simply take the proceeds from the sale and go into retirement, this should be clear as well. The more comprehensive the exit strategy, the better for both the business owner and the investors [4].

As a business owner, several questions need thinking through when putting together the exit strategy [5]. Answers to these questions will help to ensure that plans within the business are aligned with business goals and objectives. These include the following: -

1.Would you like to remain involved in the business after exit?

This question may seem ironic considering exit means leaving the business. However, it is worth answering to determine which would be the best exit strategy to use, particularly if a younger member of the family is taking over. Remaining involved may require a seat on the board, a management position, offering advice, or even staying in business as an employee. As the business continues to grow, it is worth reviewing this question at least once a year.

2.When exiting the business, will you make money?

Answering this question will determine whether the exit strategy is based on going through tough times in business or exiting when experiencing growth and success. This requires looking at the long-term financial plan for the business and placing milestones that help measure their achievement. At the end of this process, the business owner will have a threshold to guide whether exit will mean some money received.

3.How much money would you like to make when you exit?

This ties up with the purpose of the exit. Some business owners begin ventures with the sole purpose of selling the business at the point that it achieves a particular goal. Others are motivated to grow the business until it can qualify for an IPO, and they can make a massive return. For some, the exit strategy is the route to retirement, and the payoff they are seeking should help them cater to the rest of their lives. When clear about the amount of money expected, the time needed for the exit strategy to be effective becomes more apparent.

4.Should the business continue under new ownership?

This question addresses the type of exit strategy that will be chosen. In the event of a merger or acquisition, the business will be altered to create a new entity. This means that it will not continue in the same way when under new ownership. When the business is being transitioned to family members or

employees, it is possible to put in a clause that the business should continue in the same spirit.
