Exit Strategies For Entrepreneurs
Posted by Vicki Donlan on Mon, Jan 31, 2011 @ 08:47 AM
There are a variety of ways for an entrepreneur to exit his/her business as the diagram above demonstrates. But clearly most exits won't provide the future an entrepreneur dreams of when the time to move on emerges.
Believe it or not the number one exit strategy practiced by entrepreneurs in the U.S. today is death or disability. That's right...after spending years on building a business with every penny he/she could scrape up, ignoring family events such as birthdays, holidays, vacations, and children's performances and putting enormous stress on his/her health, the majority of entrepreneurs exit their business in a box, or close to it. This is not meant to be overly dramatic but to highlight the point that without a clear exit plan for your business the worst possible scenario is the only scenario and your inheritors and/or investors deserve more....and so do your customers, your vendors and your employees. Every one of these individuals also has a sizeable investment in your business.
The second most likely exit for business is the nervous breakdown or the "I'm too burnt out to continue one more day working like this". Entrepreneurs just starting out with enthusiasm and passion can't imagine this day could ever happen....but, I can tell you, as a business coach, I see it every day. Once the nervous breakdown and/or burn out begins it is very difficult to begin the long process of an exit plan. Why? Because the average exit plan is at least a 3 year to as much as a 7 year plan. Once you have made the decision to leave, move out, closed down etc. a 3 to 7 year plan will not seem like an option.
The final, unfortunately, too often not planned exit strategy of a business is its sale. Planning for the sale of your business, well in advance, does not, as too many entrepreneurs believe, mean that you have planned on a less than successful business -- just the contrary. It demonstrates that through carefully planning you will position the business to be attractive to the right buyer and build it with greater profitability to you when the time comes to transact a sale. Who you will sell it to will be answered in a future BLOG. But, no sale can take place if an entrepreneur does not have an exit strategy in place.
As an entrepreneur you have every right to decide what happens to your business and to yourself. The diagram in this BLOG should hopefully guide your decision.
If you want to discuss your plans for an exit strategy, contact me for a 30- minute free consultation. A conversation will keep you moving around the board game of the exit strategy game.
Contact me for an exit strategy consultation.