So you’ve started a business. Congratulations! But have you thought about your business exit strategy?
Before I dig into that, I want to share a story real quick…
I was at a small bar just outside of the Navy Base where the Navy SEAL Teams train with a friend of mine Rob O’Neil, who also just happens to be the Navy SEAL who killed Bin Laden. It’s smaller than just a small bar. The few times we were in there when they had a “band”, it was like packing sardines in a can. We were sitting down at a table off the side of the bar, probably drinking vodka with another drink that doesn’t endorse Rob so I’ll not say it 🙂 and I honestly don’t remember how the conversation got there but it did.
It’s one of the few conversations I can still remember in detail. Now, a small disclaimer, this was when we were younger so we went to the bar a lot so there are nights that weren’t clear the next day, please don’t hold that against me.
Now, to the conversation, I had just lit a cigar and Rob leaned forward jolting me a bit and with a stern and semi-loud presence to ask “WHAT ARE YOUR TWO EXITS? DON’T THINK! WE HAVE TO GET OUT IN 10 SECONDS AND THE FRONT DOOR IS A NO-GO.”
(OK It may have been worded differently with some added words but you get the idea.)
He then proceeded to hound me for the next 15-20 minutes about the importance of always knowing at least two different exits before you enter a situation.
I kind of shrugged it off like “Yeah, that makes sense” but then he just kept going, and honestly I always took it as the “military mind” and being on the offensive but it is, in my opinion, another “golden rule” we should all follow and do so in LIFE.
It’s not something that most entrepreneurs like to think about, but it’s important to have a plan for what you’ll do with your business when the time comes to move on, we’ll call this the business exit strategy. Whether you’re looking to sell so that you can retire or just want to build a business that can run without you, here are a few things to keep in mind.
- Make sure your business is attractive to buyers. This means having a strong financial foundation, a good reputation, and a team in place that can keep things running even if you’re not there. Buyers are looking for businesses that are low-risk and will be profitable even after they take over, so keep that in mind as you’re building your company.
- Plan for the future. What do you want your business to look like in 5 years? 10 years? If you’re hoping to sell, start putting together a roadmap now of what needs to be done in order to make your business attractive to buyers. And if you’re wanting to build a business that can run without you, start putting systems and processes in place now so that it’s easier for someone else to step in and take over when the time comes.
- Know your value. If you’re hoping to sell your business, it’s important to have a realistic idea of what it’s worth. There are plenty of resources available to help you determine this, so make sure you do your research before setting an asking price. And if you’re not looking to sell, knowing your business’s value can help you make better decisions about where to invest your time and money.
Exit strategies might not be the most exciting thing to think about when starting a business, but they’re important nonetheless. By taking the time to plan for your exit now, you’ll make things much easier on yourself (and any potential buyers) down the road.
