Exit strategy. A noun that could become a verb and conjures up both excitement and paralysis for entrepreneurs. Developing potential exit strategies can generate swells of pride if your business has achievements that allow you to craft a desirable list: impact, scale, leadership, growth, profitability, stability and value. The exercise also produces fear that you may never be able to exit. Even if you don’t want to exit, you want to know you have the choice. Paralysis then follows when you feel that you may cease to exist if you aren’t the captain of the ship that largely defines the impact you have on the world. Quite the emotional conundrum.
Do you have an exit strategy? Does this level of planning make sense for your business? Or is this still a pipe dream? If your business is in a position in which an exit may be very successful for both you and your company, it is your responsibility to have a few well thought out scenarios.
The best way to predict the future is to create it.
My exit example: My husband and I co-founded a company over 20 years ago and achieved the aforementioned criteria (impact, scale, etc.). In our 15th year of business, our youngest son left the nest for college. We’d been planning for our sons to exit, and we realized we needed to do the same for our business.
There is always a “next,” and it was time to begin discussing if we were ready and more importantly, if our company was capable of tackling “next.” We were still experiencing great enjoyment and professional growth, but we also knew that we had an obligation to prepare ourselves, our company and our team for new opportunities.
We developed three realistic, and most importantly satisfactory, scenarios that the management team could execute in a reasonable period of time.
- Continue full-time engagement solely at the strategic level (no operational involvement), focusing on large scale growth and diversification
- Exit the company, retain equity position and assume role as chairpersons with monthly involvement
- Entertain an acquisition, preferably from a synergistic buyer to create new levels of impact and growth for both entities. Note: We’d had investment and acquisition inquiries previously, and we either weren’t ready or they weren’t right
We received an acquisition inquiry that was right and we were ready (from a synergistic buyer within our industry). One of our satisfactory scenarios and a solid “next” for all. We worked hard for an additional two years to ensure successful integration and maximization of synergies and growth. Upon our exit, we did not enter Oz or “cross over.” We’ve learned that we are the same people today that we were yesterday. Our journey has not ended and we will endeavor until our minds and bodies give out. Entrepreneurs are just made this way. Time, passion and experience have given us deep talents and rich self-awareness that we plan to continue to put to work. There is probably another bring-you-to-your-knees startup with the unparalleled fulfillment that accompanies this effort. It is the pursuit that generates the happiness.
Are you ready for what’s next?