Launching and running your business is a wild ride, but it's essential for a successful business to have a well-thought-out and actionable exit strategy.
Stay with me as I tell you a story...
Recently I met with a business owner, whose business solely relied on their involvement and knowledge. So as I sat down to understand their business goals and get the rundown on their business operations to prepare a proposal for services, all that was left to ask was 'What's your exit strategy'.
This took the person by surprise, of course, they weren't ready to think about their life without business, it's all they'd known for years. However, it was a crucial piece of information for me to do my thing. Their response - 'I'll be working until lunchtime the day of my funeral' - Um, excuse me, no! That's not an acceptable answer because I know you didn't start your business to die working (they'd told me earlier that they started it to have freedom in what they did).
And this is why part of your business strategy, needs to be your exit strategy.
It will look different for each business owner, depending on your business structure and what makes the money, but here are some things that are worth thinking about for your exit strategy:
Understand what your goal is
Is your exit goal to retire, not work so many hours, have financial security, leave a legacy, focus on another business venture, or sell a profitable business? This goal will guide your decision-making process and shape your strategy. It's also important to understand why this is your goal. You can't just say you want to retire at 50, with a million dollars in the bank and fold your business, why do you want that? To have a comfortable retirement, to be debt free, and still have plenty of years to explore this world. Cool, let's do it! Without the goal and the why, it is hard to focus on reaching it.
Make a plan
This is something we can do together. Having this form part of your overall business strategy will inspire and support you to plan how your business operates, generates revenue and establish solid processes and systems. It'll also support you to have a plan for any unexpected situations.
One thing to note here is that you should seek advice from your accountant and or financial planner when making the plan. For a couple of reasons:
so they are aware of it and can support you to implement it; and
they can help prepare you for any sale or transition to a family member.
Teamwork makes the dream work
By having a strong and empowered team around you, even if it is only one solid person to back you up, they will know the ins and outs of your daily operations. This team is the key to your successful exit, enhancing your business's value and ensuring a smooth knowledge transition.
Communicate your strategy
You may feel uneasy doing this, but it's imperative to share your strategy with your family and at the very least, your accountant. Be prepared for the unexpected and also be prepared to have them hold you accountable, especially your family.
A well-thought-out and purpose-driven exit strategy can safeguard your finances and provide the roadmap for your future.
So, what's your exit goal?
