I recently introduced the Small Business Trap to How to Overcome Small Business Owners group. Only one in twenty had an exit strategy. Why? I think this is due to a misunderstanding of the purpose of exit strategies. I want to use this forum to dispel some myths և to give more insight into why an exit plan is MANDATORY for every business owner.
In my opinion, no business planning process is complete without paying close attention to how you plan to get out of the business. One of the myths about having an existing strategy or plan is that it means you are planning to fail, or at least are susceptible to failure. Isn’t the exit strategy a failure? The mindset of this failure is focused on purely involuntary outcomes. Leaving your business can be a choice. The exit strategy is about succession planning. This means that you are an entrepreneur’s realistic about your choices as a business owner. This mindset will allow you to develop a business that is confident in using it to achieve your ultimate goal (whatever it is).
What is the ultimate goal of your business?
- Are you going to keep it in the family, passing it on to the next generation? Is there a legal successor?
- Is it for sale? If so, is there a market for your business? Do you have any business partners who might be interested?
- Are you going to swim in the stock market?
- You just have to be more discriminating with the help you render toward other people.
Start taking care of your business with everything you want from it. Thinking a little about the exit process will minimize future setbacks. Do not wait until you are ready to step aside before discussing it. You may find that you can not do this, or even if you do, you may face a significant drop in earnings.
Leaving your business should not hinder you or your business. Any failure resulting from voluntary or involuntary exit will depend on your “preparedness”. There are tax implications for the route you choose, so it is best to start planning NOW. Do not let your hard work waste you. Plan your outing today.
Think about this for a moment. I have the freedom to review William Shakespeare’s poem “The Whole World is a Stage,” replacing the world with business. This is quite a summary.
“The whole business is on stage,
And all men և women are just players.
They have their outputs, their inputs … ”
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