“Most traders never plan or even discuss their Forex exit strategy. “
In the world Forex trading, that’s what Pete Visconti says. In his world, traders pay more attention to their entry, setting up a good trade and timing profits. They forget or don’t look at the cost of not having a Forex exit strategy for each trade too.
As Visconti learned the hard way himself:
“Although, traders will argue which is more important, you need to understand that they both are. Just make sure they are planned and part of your trade plan.”
Analogous to his advice for traders to have a Forex Exit Strategy, here are my four points for Entrepreneurs/CEOs to plan your business exit strategy before you start:
1. Know What Your Business Exit Strategy Will Be BEFORE You Launch Your Business.
If you are in business and didn’t do this up front, you are already behind. It’s already harder for you to make good clear decisions about your business day to day, because you don’t know what your exit options are.
Therefore, if you don’t have an exit strategy in place, put exit planning on your critical path now to increase the value of your exit – whenever that may be.
2. Consider Multiple Exit Strategies
When you lock down your exit strategy too soon, you eliminate the possibility of alternative opportunities providing even better solutions. When you maximize the number and variety of options on the table; you have more choices, more opportunities, and can make better decisions along the way.
The sooner you start exploring alternatives open to you, the more control and more choices you can position you and your business to benefit from. The longer you wait and the smaller your exit window, the fewer options you can consider and reducing the value you can realize at closing.
3. Always Initiate a ‘Stop Loss’ as Part of Your Exit Strategy
In the context of your business exit strategy, a ‘Stop-Loss’ is a contingency plan if things go awry and you must get out fast. You have an emergency exit from the building. You have a backup of your hard drive offsite. You need a plan for other crisis scenarios.
It could be an insurance policy, a backup successor, a backup exit plan that is not ideal, but fulfills many of your criteria and can be invoked quickly. It’s like having a co-signer on a key bank account or having a second key holder for your lockbox.
4. Stick to Your Business Exit Strategy just as Conscientiously as Your Business Strategy
One of the biggest obstacles business owners face is getting distracted by the ‘new shiny object’. They get restless or bored working the sound strategy they are implementing and decide to shake things up without any stopgaps to protect them or the business.
That lack of discipline can cost you your retirement and the business in the end. Revise it strategically if necessary. It’s in your best interest to trust your exit strategy and follow it with discipline.
Most entrepreneurs will skip these elements of laying out their business. Most CEOs will trivialize the importance of their exit plan in building the success of the business. The flaw in that thinking is that business is all about making a profit.
Planning your business exit strategy from the outset is an imperative to achieve your goals for the business. Consequently, your daily decisions all lead to how much profit you achieve and what you want to do with the resulting profits.