You wouldn’t think of starting a road trip without knowing where you were going. You also wouldn’t play a game if you didn’t know how to win. But over 99 percent of business owners don’t know how they plan to “win” the game of business because they don’t have an exit strategy.
An exit strategy is not a plan for failure. It is a plan for success. Developing an exit strategy when you open your business will enable you to make the best decisions. The choices you make today will be much different if you know that your exit strategy is to sell your business in ten years for the most amount of money possible. Based on this exit strategy, every decision should be made in a way to maximize the value of the business in order to get top dollar in 10 years.
So how do you make an exit plan?
First, understand there are no right or wrong answers—only different ones. Your strategy should fit your goals. The logical place to start then is with your long-term goals. There are three things that you need to know before you begin:
- Where are you headed?
- When do you want to get there?
- What do you want your business to look like when you get there?
Read Chapter 12 of The E-Myth Revisited by Michael E. Gerber for an excellent discussion on an exit strategy. He calls it, “Your Primary Aim”. These are just a few of the questions he brings up:
- With no clear picture of how you wish your life to be, how on earth can you begin to live it?
- How would you know what first step to take?
- How would you measure your progress?
- How would you know where you were?
- How would you know how far you have gone?
- How would you know how much farther you had yet to go?
You have a primary aim now! If you don’t discover it or try to work against it, you will sabotage yourself every time. Discover it and work toward it, and you will increase your chance of success dramatically!