How important is it to have an exit strategy for your business? Pretty important. It's a fact that entrepreneurs often have to part with their businesses, with a 10-year failure rate of 70 percent. Most of the time, this happens unexpectedly and forcefully, bringing a lot of frustration and disappointment. Get prepared to learn more about the importance of being prepared by having an exit strategy even when you think your business doesn't need one.
Many entrepreneurs have failed and had to pay for their mistakes. Wanting to help others avoid this and experience a positive exit, Marvin Storm launched The Business Exit Stories Podcast. The experts and consultants of this process share valuable insights on how an entrepreneur can prepare to exit from their business and not repeat others' mistakes.
A Business Exit Requires Preparation
Entrepreneurs are good at what they do. In time, they become an expert at their businesses. Sometimes, they get into the frame of mind that when it comes time to exit, they're going to do the same thing. However, the data doesn't support that theory.
The entrepreneurs that show up at the last minute unprepared for an exit don't optimize the value of their business. If they just took a little bit of time to think about it and put some balls in motion before they arrived at the finish line, they would create substantially more value at the time of exit than if they didn't.
''At my last exit, I thought I knew a lot. But, sometimes, you don't know what you don't know. When you spend so many years in the fast lane, then getting on the slow lane, or being pulled over to the side of the road, it isn't all that exciting. And so I got to thinking about my last exit, and I thought of being more knowledgeable, more insightful at this level before I could have done better.''
The Importance of Being Prepared to Exit
The inspiration behind The Business Exist Stories Podcast came from Marvin's personal entrepreneurial experience when he faced different challenges and unexpected turns. He wanted to share these valuable insights for people that bought or started a business and are growing and scaling it. The podcast offers pieces of advice for the time to step away from your business.
''I intellectually understood that when things are going well, you're building your business, you've got your nose to the grindstone, and you can see that path to doubling or tripling your business, you need to start talking about an exit here.''
Learning How to Exit a Business Successfully
Marvin advises business owners to exit when they reach their peak and not wait until their hands are tied. The good exits that turn out well are those where the entrepreneurs were following the trend of their business and decided to act at the right moment.
However, choosing the right time can be difficult. Marvin invites entrepreneurs to put themselves in the chair of the buyers and look at things from their perspective. If you can position your company to show the buyer that there's a lot more opportunity in the market and that you don't believe that you have the energy, the time, or the skills to take it to the next level, it may be the right moment for your exit.
''If you don't do the thinking and the planning, it's unlikely you will exit successfully. Some people get lucky. The timing works in their favor, being in the right place at the right time. But the probability is that this is a rare and exceptional situation.''
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