I recently gave a presentation entitled “Small Business Risks and How to Overcome Them” to a group of small business owners. Of the twenty people, only one had an exit strategy. why? I think this is due to a misunderstanding about the purpose of exit strategies. I would like to use this forum to dispel some of the myths and give more insight into why every business owner should have an exit plan.
In my opinion, no business planning process is truly complete without giving due consideration to how you intend to go out of business. One of the myths about having an existing strategy or plan is that it means that you plan to fail or at least accept failure. Exit strategy not related to failure? This failure mindset focuses only on involuntary exits. Quitting your job can be a choice. Exit strategy relates to succession planning. This means that you are proactive and realistic about your options as an employer. This mindset will enable you to develop a self-sufficient business, and take advantage of it to achieve your end goal (whatever that may be).
What is your ultimate goal for your business?
- Do you intend to keep it in the family by passing it on to the next generation? Is there an heir?
- Is it to sell in the end? If so, is there a market for your business? Do you have business partners who might be interested?
- Do you intend to put it on the stock exchange?
- Do you intend to simply close after achieving your goal?
Start prepping your business for whatever you want out of it. Giving some thought to the checkout process will reduce any future disruptions. Don’t wait until you’re ready to step down before thinking about it. You may find that you are unable to do this or even if you are, you may face a significant drop in profits.
Getting out of your job doesn’t have to be disruptive to you or the company. Any disturbance resulting from voluntary or involuntary exit will depend on your ‘willingness’. There are tax implications on any route you choose, so it’s best to start planning now. Don’t let your hard work go to waste. Plan to go out today.
Give this some thought. I have taken the liberty of revising William Shakespeare’s poem “All the World is on a Stage” to replace business. This pretty much sums it up.
“All business is a stage,
And all men and women are just players:
They have their exits and their entrances…”
Griselda
Your small business advisor – helps you improve your bottom line.