It takes a big commitment to start and grow a business.
You need to be clear on your mission and vision, business model, market research, marketing and sales strategy, and operations to implement your business plan.
You take risks and set goals.
You can be consumed by the day-to-day responsibilities and urgent demands.
All of this eats up time.
There’s another critical piece that gets put off but is as essential to achieving your long-term goals. That is your exit strategy. If you include your exit strategy as part of your initial goal setting, then all of your goal achievements will line up and lead toward your ideal exit strategy and you will have a much greater likelihood of monetizing the business you built. Here are a few guidelines to start:
- Choose the right exit strategy for your goals
You have monthly and annual goals for your business. Commit to these intermediate goals only if they are aligned with your long-term goals and the ultimate goal achievement of your ideal exit strategy. Otherwise, they take you down rat holes or dead end tangents.
- Set business growth goals aligned with your exit strategy
Your growth goals are essential to the health, strength and survival of your business. Look at your growth goals in the context of the exit strategy you want to implement. Be sure your growth goals are taking you in the same direction. Growth that is in conflict with your exit plan or competes with your long-term goals will hurt the business and limit your ability to achieve your exit strategy.
- Identify goals to increase value
The value of the business is not just in terms of assets or cash flow. It’s also in your intellectual property. A lot of your intellectual property is stuck in your head. Your intellectual property could also be in your team, your processes, and in the relationships you cultivate and maintain with clients and vendors, etc. So your objective to increase value before your exit could be to capture the intangible value in these less quantifiable areas. This will translate into a much higher valuation of the firm.
- Plan your exit strategy by intention rather than by default
This sounds like a lot of work. In fact, it is. Nevertheless, if you don’t do the work to plan your exit – your dream of achieving an ideal lifestyle, living your legacy and leaving a dynasty – then you are abdicating both the responsibility and the reward. If you don’t plan your exit by design, then you will settle for what you get by default.
- Systematize your exit strategy to maximize value
The more you can systematize your business so someone else can run it equally well without you, the more a buyer will be willing to pay you to keep it going.
The better you are at systematizing everything, the easier it is for a broker to pitch and leverage that value for a higher price. This step takes discipline and consistency that starts long before you intend to exit.
That’s how you ensure your own successful exit strategy.