There’s some controversy out there about how creating an exit strategy is akin to setting your business on the road to failure. Unless your exit strategy is to immediately get up, power everything off, lock the door and toss the keys, there is much you can learn about putting some thought into an exit strategy.
An exit strategy is more than “When can we sell?”; for some, it’s succession planning, and for others, a set of metrics for deciding “Am I still interested and engaged in what I’m doing?”. Every strategy is as individualized as the business it’s tied to.
While I was running my manufacturing company, after getting it off the ground, I wasn’t sure how long I’d want to continue. The startup phase was high-risk, high-pressure and encompassed all the interesting business challenges I enjoyed tackling, but was I interested sticking around forever? Was there something in between?
Below are 3 advantageous reasons in taking the time to think about an exit strategy:
1. Frame your company goals
With either a long or short term enterprise, scheduling check up points to figure out where your equity actually is versus where you want it to be is critical for aligning your business plan goals.
Is the direction you’re headed the right one for the market and revenue stream, or do you need to change tack?
2. Drive how you do business
Customer and market share acquisition could be your main focal point, or aligning yourself with one larger customer whom you’re interested in selling to in the future; both are key business drivers and are also dependent on your company’s goals.
3. Position yourself for the future
It’s ok to imagine your life post-business; whether you want to be seen as an industry expert, mentor or to springboard (or launch) what you’ve learned into your next venture. You’re going to put a lot of yourself into building your business, so what do you want leave with?
For me, I had hit the goals I wanted to achieve with my product and the business. On the personal side, I felt I was burning out. These were signs for me to kick in my exit strategy and find a buyer.
The strategies you form now can change over time; it’s your business to build.
Regardless if you’re pro or con about having an exit strategy, don’t create a job for yourself that you can’t leave.
Do you have an exit strategy? Did you create one as part of your business plan?