An effective exit strategy should be planned for every positive and negative contingency regardless of the type of investment, trade or business venture that is entered into. This planning should be an integral part of determining the risk associated with the investment, trade or business venture. In the case of a startup business, good business people always plan for a comprehensive exit strategy in case business operations don’t meet predetermined milestones. When trading securities, whether it’s for long-term business exit planning or intraday trades, it is imperative that exit strategies for both the profit and loss sides of a trade be planned and diligently executed.
In the context of trading, exit strategies are extremely important in that they assist traders with overcoming emotion when trading. When a trade reaches its price target, many traders experience greed and hesitate to exit for the sake of gaining more profit. Ultimately, this leads to winning trades turning into losers. The offers that appear in this table are from partnerships from which Investopedia receives compensation.
Barriers to exit are obstacles or impediments that prevent a company from exiting a market. The Lanchester Strategy is a battle concept that can be applied by businesses entering new markets. Assortment strategy refers to the number and type of products displayed by retailers for purchase by consumers. Judo business strategy is a plan that applies martial arts principles to dealing with industry rivals. An entrepreneur is an individual who founds and runs a small business and assumes all the risk and reward of the venture.
A business exit strategy is an entrepreneur’s strategic plan to sell their ownership in a company to investors or another company. Investopedia is part of the Dotdash publishing family. There are no Videos in your queue. There are no Articles in your queue. There are no Podcasts in your queue. Opinions expressed by Entrepreneur contributors are their own. Entrepreneurs live for the struggle of launching their businesses.
But one thing they often forget is that decisions made on day one can have huge implications down the road. The Modified Nike Maneuver: Just Take It. One favorite exit strategy of some forward-thinking business owners is simply to bleed the company dry on a daily basis. Rather than reinvesting money in growing your business, in lifestyle companies, you keep things small, take out a comfortable chunk, and simply live on the income. In one of my most memorable Harvard Business School moments, my fellow classmates and I asked the owner of a small, fabulously profitable manufacturing company why he didn’t grow the business bigger and sell it for a gazillion dollars. You’ve had way too much schooling.