An exit strategy is a plan for an uncertain event that might happen in future to dispose off an asset or an unprofitable business with minimum loss.
A business exit strategy for an entrepreneur is a plan to sell his ownership in a company to investors or another company. An exit strategy gives a business owner a way to reduce or liquidate their stake in a business and, if the business is successful, make a substantial profit. If the business can’t make profit then the plan would be to limit loss.
While for traders and investors is a way to manage their money so that they don’t holt to a stake for long time and it helps them to reduce risks. Many traders, for instance, enter a trade without an exit strategy and are often more likely to take premature profits or, worse, run losses.