Learn How Exit Plans Help You Work Through The Detail Of The Various Methods Of Leaving, And Their Strengths And Weaknesses.
The words of one very astute investor reinforce the importance of exit plans. He stated that before he bought anything as an investment, he either knew, or had a very good idea on how he would divest. He understood at a visceral level, the importance of knowing how to get out.
What about you in your own business. Have you ever done any exit planning? Have you ever considered either formally or even informally, what the conditions needed to be to trigger selling? This is related to the notion that if you don't know where you are going, you won't recognize when you get there.
These plans recognize explicitly or implicitly the law of diminishing returns. Where a unit of incremental input produces a smaller incremental output than previously. Bring that back to your business. Have you developed it to the point that no amount of your hard work will make it any better, or will make it very little better.
This type of planning demands that you assess your own strengths and weaknesses. Your likes and dislikes. If taking your business to the next level will require you to implement an advanced technology, and you feel incapable of doing that, that tells you something. Or if you simply dislike doing it. The message is much the same.
And as you contemplate exit plans for your business, you may have a different hurdle that you will find difficult or impossible to surmount. It may not be technology. It may be size, head count, investment, or something else entirely. But there is likely to be something.
Whatever the trigger or triggers are, identifying them in advance can be extremely useful. First of all you will recognize when you are approaching them. Identifying them will also help you take the first step toward preparing your business for sale.
Don't follow the path of many business owners. Something triggers in them a desire to sell their businesses. And it may not be the best or most rational thing to do. Largely because the trigger will most frequently be emotional. And decisions based on emotion are frequently not the most rational.
If you have worked on exit planning, you will be able to examine the emotional reaction, and compare it to your plan. If you have established criteria that will precipitate selling, and your emotional reaction is not one of them, you will have reason for second thoughts. Also your plan will also help you avoid doing something based on hope rather than reality.
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