Entrepreneurs generally avoid thinking about harvest issues and issues related to selling a business. Not many companies don’t even have a formal harvest plan. Selling a business is often viewed as abandoning the business; Or, an entrepreneur is driven to sell businesses when the possibility of losing the entire business looms over him. But, as many forward-thinking entrepreneurs have shown, selling at the right time can be a strategic move, rather than a last-ditch effort to avoid bankruptcy.
The possibility of being forced to sell a business generally arises when an entrepreneur faces difficulties in the market in terms of tough new competition, entry of new technology, excessive losses, etc. A sense of panic grips the owners and shareholders and they decide to sell, but this decision comes at the wrong time, for the wrong reason, and therefore at the wrong price. Therefore, it is very important that a company has a proper exit strategy.
Harvesting can also be a strategic window, which many entrepreneurs can treat as an opportunity. However, harvesting problems can be enormously complicated. Therefore, it is even more important that one start designing a strategy from scratch. When a business is launched, and then struggles to survive, and finally begins its rise, selling is often the last thing on an entrepreneur’s mind. But having an exit strategy ready, so that you can capitalize on when the opportunity arises, would be a good idea for an entrepreneur.
Some guidelines to keep in mind when designing a collection strategy are:
1. Patience: It takes several years to launch and build a successful business. In the same way that patience is essential during this period, it is required when reviewing harvest topics. A harvest strategy is sensible if it allows a time period of at least three to five years and seven to ten years.
2. Vision: Vision is the sister of patience. An entrepreneur must have the vision not to panic as a result of stressful events. Selling under stress is often the worst of all worlds.
3. Realistic valuation: Greed is one of the seven deadly sins. It can also sound the end for an entrepreneur, if he persists in asking what his business is worth. A realistic business valuation would attract more and better buyers.
Four. External advice: It can be difficult, but valuable, to find an advisor who can help design a harvest strategy while the business is growing while maintaining objectivity about its value and having the patience and skill to maximize it. Generally, outside advisers (such as investment bankers and business brokers) who are associated with the business for a short time act as real estate brokers do, keeping their commission as a top priority. But advisors who work with entrepreneurs over a period of five years or more can help shape the implementation of an exit strategy for the entire business, so that it is positioned to detect and respond to harvest opportunities when they arise. .