Talking to an entrepreneur about his/her exit strategy is similar to talking to an 18 year old who just graduated High School about their retirement plans. The subjects are usually something neither person has thought about, but they should.
There are a variety of reasons an entrepreneur may want to exit the business. Whatever the reason, there are good ways and bad ways to leave the business.
Here are 6 tips on having an exit strategy.
Having An Exit Strategy Tip #1: Attend Industry Events And Join Groups
There are likely groups and events that are related to the industry your business is in. I suggest that you join these groups and attend these events. Build relationships with the others who are attending, even if they are your competitors.
Keep in mind that a competitor is not the same thing as an enemy. Keep the competition friendly and when exit time arises for any, others will probably be willing to pay top dollar for the assets.
Having An Exit Strategy Tip #2: Train Someone To Take The Helm
This can be one of the hardest things an entrepreneur should do. But having a trusted individual who is completely trained in all the tasks and duties you handle on a day-by-day basis will give you a way to leave abruptly if need be.
This person can be your “go-to” CEO in case of emergency or if you feel you just need to step away.
I recommend this strategy from day 1 of starting your business. This way, if something unexpected happens, the business will still run like a finely tuned clock.
Having An Exit Strategy Tip #3: Make A List Of Potential Buyers
Even if you have no intentions of selling out any time soon, it still is wise to know who the possible buyers may be. I again step back to the emergency situation. As an example, you are lying in a coma with major hospital bills piling up. Having that list will give your spouse, children or partner the knowledge of who to approach on selling the business.
- Close friends
- Current employees or investors
- Or even competitors
Having An Exit Strategy Tip #4: Keep It In The Family
While I mentioned possibly selling to a family member in #3, another possibility is not selling but passing it down. Using this approach, you should start early with the family member by training him/her in the particulars and ensuring they have the “stuff” to handle the stress and decision making role you are passing on.
In this scenario, most entrepreneurs stay on as advisers and are prepared to help the family member at any time. Plus, you can still draw income while getting sun and sand in some remote island.
Having An Exit Strategy Tip #5: Ensure Communication And Conflict Resolution Is A Priority
No matter how big or small your business is, everyone who is involved needs to be well-versed in proper communications. You should have a plan on resolving conflicts because I know of no business that does not have some “head-butting” from time to time.
If you make communication and conflict resolution a top priority in the business from the start, when the time comes for an exit, it will flow much more smoothly.
Having An Exit Strategy Tip #6: Don’t Focus So Hard On The Exit Strategy
The last tip I am giving today may sound like a contradiction of all the rest. Yes, you should consider your exit strategy, but it should be developed and put in the archives. If your only focus from day 1 is how can I exit and make money doing so, you may be in the business for the wrong reasons.
If you follow my advice and just build the business properly and with passion, the exit door will be easy to walk through if need be.
But I also find that a huge percentage of entrepreneurs never exit… They just slowly fade out and the business continues to prosper because that entrepreneur’s spirit lives forever in the brand and business.
I hope this helps you in your business pursuits.
I want to also give you one other gift before I leave… Get the free course, 7 Days To Profitability by clicking here.
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