Why You Should Think About The Exit From Your Business Before You Even Begin
You’re ready and itching to go and start your new business! You’re excited and want to hit the ground running as fast as you can. This is the natural part. The part we all feel as we start our business. But how will you feel when it ends…
It may sound like a defeating idea to think about the exit from your business before it’s even begun. However, thinking about this may align you strategically or emotionally when the time actually comes.
It’s known as an awesome thing in the world of small business when you have the opportunity to sell what you’ve built. Other people leave their business because they just couldn’t make it profitable.
Others still end up leaving the business for other reasons. But knowing that the day may come in future can help you decide how you want to build your business today.
Whether it be a goal to sell or you’re building on a personal brand, it can be important to sit down and visualize how or why this could happen, so you can build it into your expectations.
I recently listened to a Smart Passive Income podcast episode with Dan Andrews in which he opened up and discussed how selling his business was both one of the most exciting but also most depressing things he’d ever done.
Dan has actually written a book on the topic, and I think this is a crucial exercise that all of us as business startups or entrepreneurs that we need to take a small amount of our time up-front, in order to get everything we want to out of experience.
So let’s hold our horses for a moment and reign in the excitement and let’s think our way through this just a little bit.
Determine What You Want To Get Out Of the Business.
So as you’re working on your initial business plan, or if you’re reading this and you’ve already started a website or a e-commerce site, monetized a YouTube Channel or what ever it might be, we want to start by thinking about what our goals are in our business and what we want to get out of it.
Now in my instance, my goal is actually try several and build multiple forms of income. My intent is to build this site, at least 6 more niche websites, a podcast…maybe 2. But also to publish a few books and eventually launch my own info and physical products.
But why am I building this business to begin with? This question is going to have so many different answers, and this is one of the first questions you need to ask yourself.
If you’re wanting to build on a personal brand or you have an extreme passion for the business in which you’re building, then the idea of selling the business may seriously offend you. And that’s ok, but what happens if you get bored with the startup?
You don’t want to be sitting on the other end of it with an asset that you’ve built and absolutely no exit strategy. And you need to understand that that may be a real possibility. Or you move onto something else just to have the attention wane on your first business.
Again, it’s all a matter of what you want to get out of the business. Now if you’re looking to mainly just build multiple income streams, then you can build a business almost in modules that you can sell off assets for large cash influxes when you may need them or want to pivot to something else.
Jim from IncomeSchool.com discusses in one of his YouTube videos how he built up a niche site about pontoon boats after he had bought one. Well that site starting earning him a few thousand dollars a month. That’s a pretty decent asset to have.
Except he decided to sell his pontoon boat in exchange for a camper. Interestingly enough, he decided to also sell his niche site for the boat and start a camper website instead! His take for selling out that website… over $70,000.
But think about that. It was just one asset of his overall business, not his entire business. So thinking about what you’re looking to get out of this before you start is critical to the structure that start out with today.
Brand To Stay In, Or Get Out?
I titled this subsection like this for a reason. Branding your business today will dictate what you’ll be able to do with it tomorrow. If you’re looking to build a business brand that can be run by any face is going to be much easier to sell in the future.
If, instead, you decide that you want to build a personal brand of you around your business, it’s going to be extremely difficult to get out completely.
This is another reason why I’m a big advocate of building a business on multiple pillars. One of the best strategies I’ve learned while studying all of this is to start by building your “Authority” business. This can become your holding company that fits everything that you do.
From there, you can branch your business out into other endeavors that you can grow more as assets. Whereas if you just build a business solely tied to you as a person, if you decide to get out, there may not be any residual that you can take into your next endeavor.
I believe that in knowing this before you start allows you to make these decisions gradually. Even now I’m testing the waters with this website, but the moment I start plastering my face everywhere on here, it’s now a tied down asset.
But branding is not the most important portion of this equation. Selling a business is not the easiest of processes and can take tons of time and have a real emotional effect.
Think of How Your Emotions Will React
As we said above, you’re starting your business with a ton of emotion. The excitement you feel is almost a tangible thing that you can hold in the palm of your hand. Selling it or losing it in the future, may have just as big of an effect on you, just at the other side of the spectrum.
You may have put 10+ years, tons of hours, blood, sweat, and tears into this. It’s perfectly normal to feel like this if your time with your business has come to an end. Even if you planned for it!
But knowing this at the beginning and really visualizing it can at least have you better prepared for what the future might hold. So what better time to think about it than right now.
In my far off future, with the BHAG (Big Hairy Audacious Goal) I have in mind, it’s a goal of mine to sell to a large company in future. However, after two months of writing articles, I am absolutely nowhere near that. But thinking about it, I can now strategically build my business in a way to get me there.
However, who knows, I may be so in love with my business that when that time in future comes, I may balk at the idea and resist having to move on. If you think about it, building a business from the ground up is not something that you’ll continuously do. It’s not a 12-15 times in your life type of activity.
You may do this once or twice successfully in your life. So if you are going to sell out, make sure that it’s with a sense of completion in your heart and mind and that it opens up new opportunities for you.
One quote I took from that podcast episode that really interested me is when Dan said that if you’re thinking about selling your business, instead take two months off and put someone else in charge.
If after those two months, you’re still O.K. with being away from your business, then maybe it is the right time to sell. But if after those two months you’re bored and have no idea what else you would do, then maybe you should keep up with it.
Now if you want to dig deeper on this, I would recommend checking out Dan’s book. I’ve read a few excerpts and just ordered the paperback. I’ve linked it for all of you below!
I hope this helped you all take a step back and start to visualize what the end game might look like for you. I wish you all the absolute best of luck in your business and I hope the journey is as perfect as the exit!