Is it time to Rethink Your Exit Strategy?

Exit Strategies is a topic we have discussed before but it is an important one to revisit.

An exit strategy is defined as a plan to maximize the return on your investment if and when you decide to leave the business!

The return on your investment (ROI) can come from different actions. Before you started your business, you formulated the various ways in which you can achieve this ROI. Now is a good time to revisit your Exit Strategy.

In an ideal world, you would have established your "exit strategy" on the front end. However, often that gets missed or things have changed drastically since you began your business.

As a Pharmacy Owner, there are an array of options to choose from.

Opportunities for an Exit:

• Family Member Buyout - even if one of your children is taking over the store the business must be valued. There are tax implications that must be considered. In addition, your other children come into play with regards to your estate planning.

• Junior Partner Buyout - You may want to sell to one of your Pharmacists. Determining the right structure for the deal is critical to maximizing the benefits from the sale.

• Independent Buyer - One caution . . . your books and records need to be in order to maximize the value.

• Chain - could be local, regional, or national. This buyer will likely produce the highest dollar return to you. However, do not attempt to negotiate with a chain on your own. The experts will deliver the best deal.

It is important to remember that what worked for your colleague in another town, may not be in your best interest.

Every business is different, but they all require an exit strategy. Years ago, it was quite common to believe that the real advantage to being in business for yourself was that you were your own boss and didn’t have to answer to anyone. Wrong!!! We all have to answer to someone: the bank, investors, spouses, etc. The only good reason to become a business owner is to generate acceptable returns. Careful planning increases the odds of your success, and exit strategies are part of that planning.