Before starting your business, you undoubtedly spent considerable time planning your launch. You may have written a business plan, researched the market and talked to other consultants. You might have even taken a year or two of planning and slowly building before deciding to make the leap full-time. However, few spend as much time planning their exit. An exit strategy is as essential to your business plan as knowing what you offer and to whom.
It is never too early to begin planning your exit strategy. In fact, beginning with the end in mind can be a tremendous help in starting your own consultancy. Knowing your destination will help you plot the course. How you plan to exit can impact all business decisions, from the name you choose to your operating structure.
Solo and solo-plus professionals very often do not plan their exit strategy in advance. Yet it is this group that has far more at stake and will benefit from a well thought out exit. Many began a solo career to be in control of their future, and that should include planning for the day when you no longer can or want to be your own boss.
Below are 5 areas that are impacted by your exit strategy.
- Your branding. If you decide to sell your business, is the branding transferrable, or is it so personalized that it will not stand apart from you? Take time to evaluate your brand promise and messaging. It is never too late to refine or refresh your brand so that it can operate without you, even if the company bears your name. Zig Ziglar and Mary Kay are two examples of brands that have survived their founders.
- Your operations. Do you have systems and processes that allow the business to be operated by someone else? An alternative to selling or closing your business, is to step out of the day-to-day operations and have someone else run the company. This would allow you to continue to profit from your business while pulling back from the workload. However, this option requires having a strong infrastructure that can be turned over to someone else.
- Your revenue stream. Your exit strategy can help you to determine if you need to create multiple streams of income, or plan your finances accordingly, for revenue that is dependent on you doing the work.
- Business model. Knowing how and when you want to exit can help you determine the type of business you build. Do you want a business with equity that you can liquidate, sale, merge or sell stock? Or, do you prefer to build a small business and plan your finances so that you can exit on your own terms?
- Your personal financial plan. Knowing when and how you will exit will drive your personal financial decisions. Many experts recommend planning your exit 3-5 years in advance.
You work hard to enjoy the freedoms that come with owning your own business. Don’t allow a lack of planning to limit your choices at the end of your journey. Make a conscious, well thought out decision that is right for you, your business and your circumstances. And remember the best journeys have a destination but allow for flexibility in how you get there.
Do you have an exit plan? If so, how has it impacted your business? If not, what would help you to formulate one?
Photo via Unsplash | Kev Seto