Before you even launch your business, you should put together an exit strategy. Too many entrepreneurs skip this step, believing they can think about it later.
Well, if you’re planning to be successful in business, you need to think about it now. Not because you’re being greedy and you’re only in this for the money. I know, your business is your baby, and you’re going to invest everything you’ve got into it.
You need to think about your exit strategy because it’s the right thing to do for your business. Here are five reasons why.
- Investors will ask about it. Investors will only hand over their hard-won cash if they know how they’ll make money from your business. Are you planning an IPO? Or to sell the business? If you want to sell, who will buy your company? Why would they buy you? If you can’t answer these questions, you could lose the opportunity of investment. In other words, if you don’t have an exit strategy, you put your whole business at risk.
- It forces you to think strategically. It’s a fact of life that businesses need to make profit. And not just enough profit to get by, but enough to thrive and attract investment. How will you make your business so successful that other businesses will want a piece of the pie? By facing this question, you’ll create a more streamlined and profitable business. You’ll see the level of profit you really need to make for your business to be considered a success.
- It keeps you motivated. An exit plan is your end goal. By knowing the rewards you’ll receive if you make your business a success, you’ll be more motivated to give it everything you’ve got today.
- You might grow tired of your business one day. Even if you’re totally in love with your business idea today, there will come a time when the magic wears off. Even if the love continues, you’ll have to hand over the reins at some point. Maybe you’ll get burnt out, or you’ll want to start another business venture, or you’ll reach retirement age. It’s useful to have your escape hatches ready for when you need to use them.
- Without an exit plan, you should just go fishing. Running a business is not a past-time. Yet if you don’t have an exit plan, your business is exactly that: an expensive hobby. It costs you a great deal in time, energy and money. If you want a hobby, take up golf or fishing. If you want to make money, start a business. But have an exit plan too. Or you’ll be stuck with it for life.
I hope I’ve convinced you that you need to create an exit plan, today. Yes, it’s early days, but it’s vital to a successful launch.