Exit Strategy part 2

I am revisiting this discussion because it has become so important in today's environment and because of the the illness of a friend of mine. This potentially life threatening illness was never a part of the business plan. So now what do they do? I am reminded again through this personal challenge that most small and medium businesses don’t think about what it means to exit since the idea is to build a business. Every entrepreneur is busy spinning hats to move their idea forward with passion that the thought of exiting is so remote you might as well be in another universe. Yet, there are distinct areas that I find every business needs to consider as part of an Exit Strategy.

My life lessons in business have taught me to identify and prepare for these areas as best as practical. Since I consider every business owner an executive no matter what the size of the entity in revenues or personnel, the first area to consider is the Executive Exit.

Every Executive should be interested in leaving the business at some point. Several planned Exit targets are:

1. The attainment of some age, income level, savings acquired or other parameters that meet thought out wealth requirements.

2. The growth level or health of the business entity - sustainability.

3. The transition of the business entity to another. That being someone mentored in a succession plan, a sale or merger.

4. If the cash runs out, what is the plan? This is for self-preservation.

Unplanned Exits need to be re-emphasized and they could be:

1. Death of the executive, spouse or other key personnel.

2. Divorce of the executive or other key personnel.

3. Disaster, which could be: accidents, natural disasters, financial, market turndowns or key customer(s) exiting.

All said and done, without an exit strategy, the executive does not know how to finish the business activities which makes doing business like getting into a race with no end in sight. The potential is that somewhere along the line there needs to be an exit. The business started with and for a purpose. The Exit should be planned for, as well as having contingencies for the unplanned or unexpected.