Under the best of circumstances, the business-for-sale market is not for the faint of heart. Since most small business owners' future plans hinge on sale proceeds, even small missteps can have a cascading effect on retirements, career plans, and other major life events.

When the business-for-sale market slows down (like in recent years), sellers are left in limbo, uncertain about how long it will take to exit their companies and anxious about whether or not they will ever receive the price they desire for their businesses.

With that in mind, it's no surprise that some small business sellers are turning to more creative exit strategies. In most cases, they're accomplishing this without sacrificing price or other important sale outcomes.

3 Creative Ways to Sell Your Business

There are many creative ways to execute a business exit. Some strategies are simply more realistic than others. In the current market environment we're seeing three exit strategies, all with their own benefits and complications, that sellers are leveraging as an alternative to the traditional listing process.

1. Selling to Family Members

Selling your business to a family member sounds like it should be one of the easiest ways to exit your company. But in reality, transferring a business to children or other family members introduces a new level of complexity into the sale process.

Your first challenge will be to address how the sale will impact family relationships. Will your remaining children be okay with their sibling taking over the family business? If you plan to offer concessions, will other family members feel as though you are treating them unfairly? The interpersonal aspects of a family-based business sale need to be considered early in the process.

The other issue that often arises in selling to family members is financial. It's very common for family members to expect sellers to finance a large portion of the purchase price or to provide a deep discount to the normal purchase price. If you hoped to make a clean financial break from the business, a family sale might not be the best approach.

However, you should also consider the upsides to selling your business to family members. In addition to providing continuity, a family sale creates opportunities to extend your legacy and the life of the business you worked hard to build.

2. Selling to Employees

When family members are either unable or unwilling to buy the company, business sellers often move on to the next best thing--selling the business to employees. The possibility of selling the company to your workers can enable you to accomplish your sale goals, while at the same time ensuring the company's continued operation and rewarding employees for years of loyal service.

The other benefit of selling your business to your employees is that it provides creditors, customers, and other stakeholders the assurance of a seamless transition. In some instances, this can make it easier for the buyer(s) to finalize the deal and live up to their commitments after the sale.

There are several different mechanisms for selling a business to employees including the establishment of a business cooperative or the creation of an Employee Stock Ownership Plan (ESOP). Both of these mechanisms take time to develop and implement so it's important to start researching your options early and consult with legal and accounting experts.

3. Selling to a Competitor

Another creative exit strategy involves selling your business to a competitor. Although it might feel strange transitioning ownership to a business rival, a direct or indirect competitor may have the most to gain (e.g. market share, proprietary processes, economies of scale, etc.) by acquiring your company.

Confidentiality is the primary challenge in selling to a competitor. If you give a competitor unrestricted access to financials or other protected information and the deal falls apart, your company will suffer a competitive disadvantage, and it will be harder to sell the business to serious buyers.

The process of selling to a competitor is highly nuanced. In addition to confidentiality agreements, the right information needs to be released at the right time in order to protect your interests. So for most sellers, the best approach is to consult with a qualified business broker and/or attorney with experience in competitor acquisitions before you approach the competition.

It's important to understand that creative exit strategies require the same level of diligence and preparation as a typical business sale. Even if you're handing over the business to a family member or trusted employee, it's essential to pursue an independent, third-party valuation and to follow standard legal procedures.

You should also know that a creative exit strategy doesn't necessarily shorten the amount of time it will take to transition out of your business. In some instances, a creative strategy can actually prolong the sale process. However, the benefit is that by thinking outside the box, you can eliminate uncertainty and exercise greater control over the achievement of sale outcomes.