How do you decide when to sell your business and what's a good exit strategy?

When deciding to sell your business, you should start planning your exit from the very beginning. Identify who your potential buyers will be in four years and gear everything you do toward making that sale. One entrepreneur explained: when you start a business, you should work out at the very beginning who's going to buy it in 4 years time, then identify which big firms might want to buy your successful company and structure your business accordingly. A good exit strategy involves building recurring revenue streams, which significantly increases your company's valuation. Institutions will multiply your annual recurring revenue by 10 or 20 to value your company, so you can achieve a very high valuation based on much smaller revenue if you focus on subscription models. Additionally, when selling, structure your business so it doesn't depend entirely on you. Remove yourself as part of the company so buyers aren't taking on key man risk. One founder noted that what she did wrong was not removing herself as part of the company, explaining that you want to sell a company that doesn't have you attached to it. For the actual sale, don't try to negotiate alone—get the deal structure correct and create enough of a platform with proper processes and procedures to obtain the highest valuation possible.