--- title: 4 Reasons Why Your Business Needs to Include Exit Strategies description: Struggling to get right exit strategies that your business need can increase your risks.You should know these crucial tips of our Business plan consultants --- # 4 Reasons Why Your Business Needs to Include Exit Strategies ## 4 Reasons Why Your Business Needs to Include Exit Strategies [ Matthew Khalili ](https://planwriters.com/blog/author/admin1) Nov 5, 2013 6:17:30 AM Pleasing an investor is never an easy task. To start, they need piles of research information, numerous helpful and accurate data displays, and pristinely executed data before they’ll even think about [financing your business](https://planwriters.com/investor). Billionaire Warren Buffet, worth $58.5 billion today, explains that, “Risk comes from not knowing what you’re doing.” Financial lenders must know that you did the legwork in reaching your final [business plan](https://planwriters.com/), which also involves creating exit strategies. ![exit-strategy-1](https://planwriters.com/hs-fs/hubfs/Imported_Blog_Media/exit-strategy-1.jpg?width=464&height=211&name=exit-strategy-1.jpg)**1. Show investors that you have a long-term view** While some lenders are hoping to make some fast cash, most of them are looking for businesses that can steadily develop over a longer timeframe. To emphasize how you are keeping the long-term in mind, it’s important to also include exit strategies into your business plan that look past the first three years, or even before it. Since none of us can foresee the future, it’s possible you may be forced to implement your exit strategy before the three-year mark of operations. Regardless of the actual outcome, by [being objective in your business’ vision](https://planwriters.com/blog/get-your-business-plan-noticed) you can show your long-term outlook on the situation. **2. Demonstrate to investors that you have a realistic outlook** Depending on your outcome, you might enjoy a profitable exit if all your plans go well and your business goals our met, but you may also need to implement the exit strategy you defined if your business is under-performing. ![exit-strategy-2](https://planwriters.com/hs-fs/hubfs/Imported_Blog_Media/exit-strategy-2.jpg?width=417&height=278&name=exit-strategy-2.jpg)Whether you want to hear it or not, 50-70% of small businesses fail within the first 18 months so it’s important to, while hoping for the best, prepare for the worst if business fails to gain substantial revenue. Including an exit strategy proves to investors that you have a realistic view of business in today’s modern times. Entrepreneurs today seem to have grown characteristically brash, but we urge you to swallow your pride and inherit a more humble attitude. As Don Moore, Associate Professor of Management in Berkeley's Haas School of Business at the University of California, states, "If entrepreneurs think they're better than others, they may be overly optimistic and start things with low chances of success.” **3. Mitigate your risk** By taking the step of compiling a contingency plan in the form of an exit strategy shows lenders that you’ve assessed the risks and have even prepared for the very real possibility of things going south. Referring to the quote from Warren Buffet, effective planning minimizes the margin of error. If your exit strategy also motions for ways of deciding when it should happen, your business will be more appealing to financial lenders. This means that, by including an exit strategy in your plan, you’ll be preparing to exit before you absolutely have to. Meaning, by taking the proper steps for creating an exit strategy you could very well avoid having to file for bankruptcy or face other serious penalties or fines when things go wrong. **4. **Planning for the worst can save you later**** A pre-defined exit strategy might by your saving grace to saving face when it comes to your prospective lenders if your business isn’t going the way you hoped and it continually misses even the minimum expectations. An honorable exit that includes meeting your obligations and making owed payments is nothing to be embarrassed about. "I've never heard [a millionaire entrepreneur] say they hit it right the first time out," states Steve Siebold, an experienced entrepreneur and consult from Palm Beach, Florida, "The bigger they are, the more they've typically failed." ![exit-strategy-3](https://planwriters.com/hs-fs/hubfs/Imported_Blog_Media/exit-strategy-3.jpg?width=368&height=246&name=exit-strategy-3.jpg) [Business Plans](https://planwriters.com/blog/tag/business-plans) ## Read On ### [How to Create A High Growth Approach With Business Development Plan Having the right business development plan is actually the key to the success of your company. You...](https://planwriters.com/blog/how-to-create-a-high-growth-approach-with-business-development-plan) ### [A Professional's One-Hour Blueprint for Developing a Real Estate Business Plan Table of Contents 1. What is a Real Estate Business Plan2. The Benefits of Creating a Real Estate...](https://planwriters.com/blog/a-professionals-one-hour-blueprint-for-developing-a-real-estate-business-plan) ### [Planning for Profit: Financial Forecasting in Real Estate Business Plans Introduction](https://planwriters.com/blog/planning-for-profit-financial-forecasting-in-real-estate-business-plans) ```json { "@context" : "https://schema.org", "@type" : "BlogPosting", "author" : { "@type" : "Person", "name" : "Matthew Khalili", "url" : "https://planwriters.com/blog/author/admin1" }, "dateModified" : "2022-08-23T08:28:35.315Z", "datePublished" : "2013-11-05T14:17:30.000Z", "headline" : "4 Reasons Why Your Business Needs to Include Exit Strategies", "mainEntityOfPage" : { "@id" : "https://planwriters.com/blog/4-reasons-why-your-business-needs-to-include-exit-strategies", "@type" : "WebPage" }, "publisher" : { "@type" : "Organization", "logo" : { "@type" : "ImageObject", "url" : "https://planwriters.com/hubfs/final%20logo%20tpw-1.png" }, "name" : "The Plan Writers" } } ``` ```json { "@context" : "https://schema.org", "@type" : "Organization", "contactPoint" : { "@type" : "ContactPoint", "areaServed" : "USA", "availableLanguage" : [ "en", "English" ], "contactType" : "Technical Team", "telephone" : "866-349-3241" }, "logo" : "https://planwriters.com/hs-fs/hubfs/Imported%20sitepage%20images/final%20logo%20tpw.png", "name" : "Plan Writers - Get Your Business Plan | Business Plan Writers", "sameAs" : [ "https://www.facebook.com/ThePIanWriters", "https://www.instagram.com/planwriters/", "https://twitter.com/planwriters/", "https://www.linkedin.com/company/theplanwriters/", "https://www.tiktok.com/@theplanwriters" ], "url" : "https://planwriters.com/" } ``` ```json { "@context" : "http://schema.org", "@type" : "Service", "aggregateRating" : { "@type" : "AggregateRating", "bestRating" : "5", "itemReviewed" : { "@type" : "LocalBusiness", "address" : { "@type" : "PostalAddress", "addressLocality" : "Los Angeles", "addressRegion" : "California", "postalCode" : "90067", "streetAddress" : " 10250 Constellation Blvd Ste.100" }, "image" : "https://planwriters.com/hs-fs/hubfs/Imported%20sitepage%20images/final%20logo%20tpw.png", "name" : "Business Plan Writers, Business Plans for Startup - Plan Writers", "priceRange" : "$$", "telePhone" : "866-349-3241" }, "ratingValue" : "4.3", "reviewCount" : "33", "worstRating" : "1" } } ``` ```json { "@context" : "https://schema.org", "@type" : "FAQPage", "mainEntity" : [ { "@type" : "Question", "acceptedAnswer" : { "@type" : "Answer", "text" : "We have found that when entrepreneurs dedicate their time to planning their business, not only do they save money by avoiding mistakes, they are also more likely to succeed. A good business plan requires the entrepreneur to address all the challenges he or she will face and visualize exactly how he or she will achieve his or her goal. Through this process, the entrepreneur will improve his or her understanding of the opportunity ahead and better prepare him or herself for success. This is why banks and investors almost always require the entrepreneur to develop a detailed and professional business plan. " }, "name" : "Do I really need a business plan?" }, { "@type" : "Question", "acceptedAnswer" : { "@type" : "Answer", "text" : "Even if you have an outstanding business background, it can take months to process relevant market research, model your financial projections and synthesize all your data to complete an impactful business plan. It’s much more effective for you to focus on developing your business while leveraging outside experts to write an efficient business plan and gain unbiased perspective into your business. By using The Plan Writers, we will identify new opportunities and challenges for which you can prepare. Finally, we subscribe to top dollar academic literature to which you would most likely not be privy. The research reports alone are usually worth more than the business plan you are paying for!" }, "name" : "Why can’t I write a business plan myself?" }, { "@type" : "Question", "acceptedAnswer" : { "@type" : "Answer", "text" : "We spend a tremendous amount of time head-hunting quality writers that meet our standards and fit into our company culture. Any writer that is on our payroll will have an MBA and/or at least 5 years of professional work experience. This is to ensure you have the most knowledgeable business plan writing service for your business." }, "name" : "Who are the writers and what are everyone’s qualifications?" }, { "@type" : "Question", "acceptedAnswer" : { "@type" : "Answer", "text" : "There will most likely be someone on our team that has prior business experience in your industry. Chances are, we probably have already written a business plan similar to your business. Does this mean that we ever recycle material? No! We not only personalize every business plan, but you will also be able to leverage all the best practices and trends we’ve discovered. The bottom line is that we all come from diverse backgrounds and are passionate about working through different business models." }, "name" : "Have you worked in our industry?" }, { "@type" : "Question", "acceptedAnswer" : { "@type" : "Answer", "text" : "We often time get asked this question and have to set the proper expectations. As writers, we absorb, guide, and convey your vision to help guide your success. Ultimately, it is up to you to recognize if you have the resources, expertise, and determination to accomplish your goal. An investor or bank may not fund your business plan. However, we can promise you that it will never be rejected because of us." }, "name" : "What’s the success rate with your business plans?" } ] } ```