Having been an entrepreneur for almost 16 years I’ve experienced the roller coaster of highs and lows, successes and failures, feelings of going it alone, and wondering, “Will I ever arrive?”
Recently, my daughter took the leap from employee to entrepreneur, and it’s been fascinating watching her begin the journey. Like many entrepreneurs, she was driven by the need to “do it better,” have flexibility and balance, and be her own boss. She’s a Pediatric Occupational Therapist who wants to make a difference in the lives of children. She is passionate about making life better for kids! From helping them do simple life tasks to improving their ability to interact and thrive in the world around them. (Yes, I am a very proud mom!)
My daughter, like most entrepreneurs, didn’t embark on this journey because she is a savvy businessperson who understands financials, strategy, and how to improve systems and processes. She just believed there was a better way to serve children and decided to find a way to do it.
Being an entrepreneur is hard work. If it were easy, everyone would do it. Steve Jobs said, "I’m convinced that about half of what separates the successful entrepreneurs from the non-successful ones is pure perseverance."
How does this relate to business exit planning strategies? The characteristics that make for successful entrepreneurs also make for successful exits. What got you here can get you there!
How to Prepare an Exit Strategy Using Your Entrepreneurial Traits
Now that you know how closely related exit planning for business owners is to becoming an entrepreneur, let’s take a look at the skills that got you here and how they can help you transition when the time is right.
Vision and Passion – Having a clear vision and passion is crucial for developing a successful personal exit. If you can articulate your long-term goals, you can align your exit strategy accordingly. In addition, having passion fuels the drive to not only build a business that is profitable but personally fulfilling, and that when planned for can create a meaningful exit.
Adaptability and Flexibility – Successful entrepreneurs understand that their exit plans may need to adapt to market conditions, industry shifts, or personal circumstances. Being adaptable and flexible allows them to adjust their exit strategy as needed, ensuring they can capitalize on the most favorable conditions and opportunities.
For example, a current client is in transition from family ownership to employee ownership. The last family member in the business wanted to exit several years back but, due to a failed succession plan and taking the eye off the ball, was forced to adjust and stay on for much longer than anticipated. Had he stuck to his original plan and exited on schedule, the business would have failed, and he would have lost significant value. By being adaptable and flexible, he is now able to capitalize on a more favorable business value and a solid succession plan.
Risk Taking and Resilience – Exit planning for business owners often involves taking calculated risks. This could involve the development of an individual successor or team (that may not work out), a sale to a third party (with unknown outcomes), or an unplanned exit. Entrepreneurs need to evaluate the potential returns and associated risks when considering exit options. The resilience to bounce back from challenges is crucial. It allows entrepreneurs to persevere, learn from setbacks and explore alternative exit avenues.
We had a client whose plan for exit was a buyout by his management team. However, the management team wasn’t capable of running the business, wasn’t financially able to buy out the owner, and several weren’t interested in being owners. In understanding the situation, the owner was able to shift. The business is now being positioned for a single management member to buy out the owner. Over several years, the successor has gained valuable professional development, personal financial stability, and wherewithal to invest, and is interested in taking on the risks and rewards of ownership. Had the owner not evaluated this early on, he would have had limited options to exit.
Problem Solving and Decision Making – One of the first things my daughter said to me as she launched her business was, “Is this what being an entrepreneur is – constantly thinking about the business – new ideas, new obstacles, new problems to solve?” Honestly, I did chuckle at that. Because that’s exactly what entrepreneurship is! And this doesn’t change as you build a successful business and plan for your exit.
Some of the most difficult decisions you will make over your entrepreneurial journey are: 1) What will life look like once you exit? and 2) What is important to you as you plan for your exit options?
Confidence – A critical characteristic of any entrepreneur is confidence. Failure is not an option. Continuous learning and growth to overcome obstacles and see new paths are critical to success. Believing in yourself and what you’re building takes all the characteristics outlined above. But above all it takes the confidence to take the leap, fail, and continue charging forward. Because at the end of the day, that’s what drives success and ultimately drives the ability of an owner to build a business they can be proud of and exit the way they want.
An Exit Planning Strategy Starts with Your Vision
Like I said, being an entrepreneur is hard work. It’s also a privilege and an obligation. When you build a successful organization, you are responsible for the employees, their families, your family, your vendors, customers, and the community. This responsibility requires you, as the owner, to apply all the characteristics that made you an entrepreneur.
When developing your exit planning strategy, create a vision, define your passion for what’s next, be adaptable and flexible as things change. Realize that the risks may be different, but your resilience will always move you forward. Your ability to problem solve and make decisions that take into consideration your goals, your options, and to confidently define your future will allow you to continue to use the strengths you’ve developed as an entrepreneur to create your successful exit.
"I can't adequately express the tremendous value I've gotten from these sessions." - Tim Daanen, CEO Roundtable member and President of B&D Warehouse, Inc.
Next CEO Roundtable Launching Fall 2024!
Designed for those owners who want to really talk about what's happening in their business and to learn and grow together in a confidential, small group setting.
Monthly AM meetings are held at Journey Consulting in Green Bay, WI.
Limited to SIX business owners - apply early!
Jayne McQuillan, CPA, MBA, Certified Exit Planning Advisor (CEPA) is the owner of Journey Consulting, LLC and author of The Value Journey: How to Drive Profits, Build Wealth, and Exit Your Business on Your Own Terms.
Our firm is focused on providing business owners and their businesses with strategic planning, exit planning, financial expertise, and organizational improvement. We use a holistic approach within all of our services by aligning leadership with business strategy and outcomes.
Schedule your complimentary consultation to begin your Value Journey today!