Question

What methods can an entrepreneur use as an exit strategy to get out of the business? What are the pros and cons of these methods?

Answer 1

Answer : Exist enterprenure strategy are used by the business in order to increase the investment portfolio of the business as well as to move in most profitable segment of the business.There are different methods which exist enterprenures strategies :

• Initital public offering has been provided to increase the share of the business.

Pros of Initial public offer :

1. Increased cash flow of the business.
2. Higher opportunity has been raised
3. Increase investment.

Cons of Initial public offer :

• Higher investment
• Diverse techinques has been used.
• Delay in decision making
• M&A has been used in order to increase an business firm strategy
• Buy back of an investment from the market.

Advantages of buy back are :

• Flexibility in the return.
• Tax benefit provided by the business.
• Share buy back as a signal

Disadvantages of buy back are :

• Unrealistic picture through ratios.
• Judgement error in valuations.

• Franschise has been used in order to captured the business.

Advantages of franschise are :

• Provened Product or services.
• Marketing expertise
• Opportunity to lean business
• Quality control standard

Disadvantage of franschise are :

• Fee and profit sharing.
• Restrictions of freedom.
• Unsatisfied expectations.
• Termination of agreement.