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How to handle the end point of your involvment with a business
Starting and running a business requires such an investment of time and attention that it's understandable that many executives put little thought into how exactly they want to exit when they are done.
Understandable, but far from optimal. For those leaders who foresee even the potential that they might not want to or be able to remain with their company in the next few years, planning ahead is the best way to ensure a good outcome.
Fortunately, pulling off a smart exit strategy is something that is well within the skill set of leaders with executive educations, with numerous avenues potentially available for exploration. Curious about what kinds of strategies you might be able to pull off with an EMBA? Here are some notable examples.
It's long been a goal of many new companies to eventually hold an initial public offering (IPO), and secure a clean and lucrative exit for the founders. The dotcom bust in the early 2000s and the great recession years later created a bit of a lull in IPOs, but recent years have seen investors once again eager to put their money behind compelling ideas that are proven earners.
Preparation for initial public offerings largely involves getting your organization’s financial house in order. Tax concerns must be addressed, for instance, and financial reporting must be immaculate. It's a time when precision and accuracy are of the utmost importance, and accidental failure to disclose important information can be costly to the company’s reputation.
For work such as this, which really must not be left to chance, graduates of Executive MBA courses may prefer to serve as overseers of the relevant financial documentation. From using their leadership skills to guide their teams, to leveraging their expertise to understand and produce effective financial reports, they are able to step in and contribute at any level of this important project.
Whether it's a roster of top-tier clients, special technology, human talent, or any other assets, there are many reasons why one business might want to acquire part or all of another. For savvy executives, this can present a compelling exit strategy to pursue down the line.
It's not entirely necessary to have a great relationship with potential partners for acquisitions and mergers, but it can certainly smooth things over. For that reason, it's a good idea for executives with an eye on an eventual exit to cultivate relationships with peers and competitors as much as possible. This is perhaps easiest for individuals who choose to complete their education at top schools like WU Executive Academy, where completion of an EMBA program guarantees entry into an influential alumni community. Should you want to gauge interest in the potential for acquisition from a large number of international players, you'll have a convenient place to go looking.
An interesting idea, perhaps less common than other exit strategies but certainly no less valid, is entering an arrangement to sell the assets of a company to management or employees. Given the potential for turmoil that can exist when a business comes under entirely new management, it might provide current employees with a bit of relief to know that they will be driving the company's future. If the arrangement is announced far enough in advance and employees know that they will be taking over the business, they might even work harder to ensure that their new holdings increase in value.
There are many different ways to approach this kind of arrangement, from directly selling the business to individuals within a company to creating employee equity plans. All can be appropriate and beneficial, so the matter becomes one of deciding which particular approach works best for you and your organization.
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Contact WU Executive Academy to sign up for an Executive Master of Business Administration!