A definition of a business exit strategy

In entrepreneurship and strategic management an exit strategy or exit plan is a way to transition the ownership of a company to another company (e.g. through a merger or acquisition), to investors (e.g. through an Initial public offering) or to the owner's children or family. Other exit strategies are management or employee buyouts, liquidating or winding up a business, whether through a bankruptcy or voluntary dissolution.

Introducing strategic management and financial partners is also a form of partial exit, which can help ensure succession and survival of the business.

Exit strategies can also used to protect businesses making sure they are prepared for the termination of big contracts and other business relationships. There are lots of different reasons why contracts come to an end, including non-performance by either or both parties, a change in the needs of either side, or that the contract has been completed. In nearly all cases, a well-developed exit strategy is critical. The strategy is developed as a way to withdraw from a business relationship with a supplier or customer. It might include the transferring assets, re-deployment of key employees and stipulate the why and how a relationship can terminate, for example, the failure to meet service level agreements, changes in circumstances, and ethical breaches.

Transition companies are professional mergers and acquisitions companies, brokers, that help business owners with their exit strategy. Services offered are sometimes referred to as transition management services or brokerages which help with the thorny questions like; How do I sell my Company? Who can find a buyer for my business? Who will negotiate the deal?