Do you need to spend time planning an exit strategy? Do you need to spend time planning an exit strategy?
Chris, I'm thinking about taking my sign making business full time. I'm discussing this with a lot of friends, and one of the questions that keeps popping up is, "What is my exit strategy?" Do I need one? "Just Thinking About It" in San Antonio Texas Dear JTAI, Common wisdom says that you need an exit strategy. During the life of the business, an owner will spend a lot of time, money, and effort making the business a success. An exit strategy forces you to think how you are going to recoup that effort when you decide to transition the ownership to another entity. An exit strategy helps you to plan for a way to transfer the accumulated capital to the owner. My problem with this thinking is that it is so negative right off the bat. I read a refreshing support to this view in a book that I am currently reading. It is "Rework", by Jason Fried and David Heinemeier Hansson. In the short chapter entitled, "Building to Flip is Building to Flop", they pose a series of questions. "Why are you trying to figure out how to get out of something before you even dive into it? Would you go into a relationship planning the breakup? Would you meet with a divorce lawyer the morning of your wedding? That would be ridiculous, right?" They further state, "You need a commitment strategy, not an exit strategy. You should be thinking about how to make your project grow and succeed, not how you're going to jump ship. If your whole strategy is based on leaving, chances are you won't get far in the first place." They have a lot more to say about this and other business topics... I highly recommend the book. You can read more about it here. So JTAI, I hope this brief quote gives you a more balanced view. And don't get the cart before the horse... spend your time on planning the success of your business, not the demise. -Chris