Scenario 1: A Major downturn in the economy that has caused cash flow to go negative and is expected to last for 2 to 3 years. As the entrepreneur, you have enough cash saved in the business to last 6 months at your current employment, inventory, and fixed overhead cost levels. What is your exit strategy
Scenario 2: There is a devastating natural disaster (hurricane or earthquake) that has ruined your facilities and completely interrupted your business. It will be months before insurance can be collected to rebuild your facilities, rolling-stock, and inventory. What is your exit strategy?
Scenario 3: A major operation has moved into your market area and the competitive pressure has caused you to reduce prices on one product line to the point that you are barely making a profit. This scenario is different, here you are asked to think and communicate what options are worth trying before “harvesting” that product line. Second, what steps are needed to harvest the struggling product line if your strategies don’t work.
Scenario 4:You have lost your financial backing from the institute you have been using for the past three years. As in scenario 3, what refinancing options are worth trying, how long do you give yourself to evaluate and investigate these options, and, finally, if nothing works, what is your exit strategy.
Scenario 5: You are approaching retirement age, have no heirs who which to run the business. You would like to sell the business and use the proceeds for your retirement. There are no “options” for this scenario, you are wanting to sell the business. Your job is to do some research about how to sell a small business, then put together a workable plan to sell the business looking at all of the options to sell that are possibly open to you.