28A - Your Exit Strategy

1) Identify the exit strategy you plan to make. Do you intend to sell your business in the next 5 years for a large return? Do you intend to stay with the business for several decades and retire? Do you intend to protect the venture as a family business, and pass it down to your children?

To think about this situation I have to setup a few assumptions. 

1. The business has grown to at least 21 mil in revenue and about 24% EBITDA
2. I have kept my depreciation low at this point and retain a high net profit at about 18-20%
3. I can strike a deal for a about 6x multiple of EBITDA

Those are pretty high goals and would warrant the 6x multiple.  Especially to someone or group that is able to grow it further by something like franchise or some other expansion.  I would sell it as soon as the right buyer came along.  This would allow me to focus on my family and possibly start another venture.  I get bored.

2) Why have you selected this particular exit strategy?

There are other options here.  I could sell it back to the employees through and ESOP or some other vehicle but I would have to ensure that some new leadership was groomed and ready to lead it properly as to not endanger the other employees jobs by driving the company into the ground. 

I chose this because mainly I am happy to grind hard for a number of years building something of great value and sell it off to then spend the rest of my years with my family and only doing the things that interest me in business.

3) How do you think your exit strategy has influenced the other decisions you've made in your concept? For instance, has it influenced how you have identified an opportunity? Has it influenced your growth intentions or how you plan to acquire and use resources?

I don't think that the exit strategy had come into mind really.  I don't normally think about how I am going to exit the thing that I have just started to build.