Business owners carefully plot their entry into the market but few spend as much time planning their exit. An exit strategy is as essential to your business plan as knowing what you offer and to whom.
“Every exit is an entrance somewhere else.” — Tom Stoppard
Your exit strategy can impact all of your business decisions. Knowing your destination will help you plot the course. Service providers and creative professionals especially those with a virtual business very often do not have a good exit strategy particularly at the inception of their business. Yet it is this group that should give even more thought to planning their own exit.
Not everyone desires to build a business empire. There are small businesses and solo professionals that have created their own job and that is more than enough for them. However, a job is simply that and if you don’t plan for the day when you no longer can or want to be your own boss you may find your options limited.
An exit strategy can help you define:
- Your branding – are you creating a brand that can be transferred or is it so personalized that it can never be sold or operated by others?
- Your operations- Do you have systems and processes that allow you to outsource or expand? Are you creating a scalable business?
- Your offerings – Will all of your business income depend on your labor or will you create secondary revenue streams?
- Your investment strategy – Are you creating a lifestyle business or a business with equity that you can liquidate, sale, merge or sell stock? If you’re making 7-figures from your lifestyle business you can choose not to grow and invest your money in other vehicles. This however requires long term financial and tax planning.
- Your personal financial plan – Knowing when and how you will exit will drive your personal financial decisions. For example, a doctor’s exit plan may result in paying off their primary home, and buying their practice building.
Don’t allow a lack of planning to limit your choices. Make a conscious, well thought out decision that is right for you, your business and your circumstances. And remember the best journeys have a destination but allow for flexibility in how you get there.
Do you have an exit plan? If so, how has it impacted your business? If not, what would help you to formulate one?