It’s all about having options . . .

The best time to plan your exit strategy is the first day you open the doors for business.

Whether or not your intention is to sell your business to an outside party, you should be prepared to evaluate any legitimate offer you might receive.

Which prospective buyer will offer you the best price for your business?

There are three desirable types of buyers:

1. Going-Concern Buyers – These buyers are typically individuals interested in buying your business to operate it. These buyers usually don’t own any other businesses, and for all intents and purposes are "buying a job."
2. Strategic or Synergistic Buyers – Strategic or synergistic buyers are interested in your company's fit into their long-range plans. Strategic buyers might be competitors, or just similar companies interested in expanding into your market. Synergistic buyers are frequently in a related business and see your company has strengths from which they could benefit — for example, you might be part of their supply or distribution chain or you may produce a type of product they would like to sell.
3. Financial Buyers – Financial buyers are primarily interested in your company's cash flow. They are often individuals or companies with money to invest, and look at many different types of industries and select businesses within them. They might be private equity groups (PEGS) or institutional investors looking for substantial returns on their investments, and usually prefer current management to remain with the company.

Strategic or synergistic buyers will pay a premium, sometimes a significant premium , in excess of the price a going concern, financial, or industry buyer is willing to pay.

However, price alone is not the answer. There are two aspects to a transaction, the price and the terms. Both are equally important.

Maximizing your after-tax net proceeds must be the primary objective of any transaction . The best price may not produce maximum after-tax net proceeds, depending upon the terms of the transaction and your specific financial and tax circumstances.

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