Starting a business is exciting and incredibly overwhelming. There are countless things to figure out, check off your list and put in place to turn your idea into a reality. But there is one thing new entrepreneurs often forget to consider thinking through in the midst of the excitement. The end of your business journey (aka business exit plan).
Oftentimes businesses just sort of happen. You start doing or selling a thing to make extra cash and then months or years later you realize, “omg I have a business”.
Other times new entrepreneurs figure out everything they can before launching.
While both start up approaches work and can lead to success, you need to stop yourself at some point and ask “what is my end goal?”.
You Need an End Goal
With every endeavor in life, it’s essential you think about your end goal. This will allow you to reverse engineer your path to success. It helps you make decisions that will impact the long term direction of your business.
And when I say end goal, I’m not talking about a general statement like, “I want to run a successful business”. I mean literally thinking about what the end of your business looks like.
Business Exit Plan
Right now you’re probably thinking, “Wait what? Why would I think about how to get out of my business before I’m really even in it.” Well because your exit plan will determine everything about how you operate your business.
If your exit plan is to sell, then you need to create a business that is sellable. It must be profitable, have systems in place to operate without you and more.
If your exit plan is to retire from your business, then you need to build a business that allows for succession and provides you a liveable retirement plan. It must create jobs, leadership positions, enough revenue to fund your retirement, etc.
If your exit plan is to close up shop, then you need to build a business that can generate profit for you to live on while it’s operating. In this scenario, you would work to build and grow your business while your market is hot, but you likely aren’t building something that could be sold or create successors.
Benefits of an Exit Plan
There is no right or wrong way to exit a business. The key thing to remember is knowing how you want to end your business will inform the decisions you make each day. From who you hire, how you grow, how much money you invest, etc. your exit plan will keep you focused as you move through your entrepreneurial journey.
My Business Exit Story
When I started my gym, I never thought about my exit plan. But I did think about my goal.
In the beginning my end goal was to create jobs and have multiple locations. Yet as time went on my vision got clearer, I brought on staff, and eventually realized that model wasn’t what I truly wanted. I was much happier growing my single location and doing most things myself.
I knew being a solopreneur wasn’t scalable, sellable or investable, but my dream shifted and I was happy to be doing the work I was doing. I never really knew or could even imagine what the end of my dream would look like.
Fast forward 6 years, I was burned out and wanted out. I had no clue what was next or how to get out. As I thought through my exit, I realized the solution was to close up shop. I could take all the profit out of my business, sell off all the equipment, help my members find new gyms and move onto the next chapter of my life.
This bittersweet process worked well for my situation. My business was always part profit, part passion project. I knew had I done things differently I could have made millions, but I was committed to my mission and didn’t want to go big.
Looking back I have no regrets about my exit, but I want to share a few things I think I could have done differently.
While my business was literally me, I could have sold the brand, equipment, programming, etc. to someone looking to get into the fitness industry. I had over a decade of recognition behind my brand and service that likely had more value than I realized. Of course, I couldn’t have made guarantees to a buyer that my members would’ve stayed, but they would at least have a strong foundation to build their own membership base from.
I also could have pivoted the business and potentially created an online coach training program and licensed my programming. That approach could have kept money coming in to this day.
And had I stuck with my original end goal of creating multiple locations with staff, there’s a strong possibility that I could have sold the business.
But here’s the truth, I was done. I had run the business intentionally and exactly the way I wanted to. It was simply time to move on and see what else life had in store for me.
Start With The End in Mind
The moral of this story is to start with the end in mind, even if your end changes throughout your journey. That way when it comes time for you to exit, you’ve prepared yourself and your business for what’s next. Be sure to create the exit that you want.
If your exit plan is to create a business you can sell, scale or retire from, stay tuned for upcoming posts that will help you understand how to create a business that aligns with those goals.
And if you need help figuring out your exit plan, don’t hesitate to set up a free business coaching session today!