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Building and starting a business from scratch is often the dream of many entrepreneurs – putting your heart and soul into your vision and watching it transform from an idea into a living being. But sometimes the ultimate goal is not only to create, but to create with a successful end in mind. A profitable initial public offering (IPO) or strategic acquisition by a larger company can end for many entrepreneurs with a story of years of painstaking effort, ultimately leading to financial independence.
After leaving two of my very own firms and training countless others through the process, I learned many things while writing an exciting story. Sure, the financial rewards are undeniably tempting, but it is also necessary to realize that quitting your job is not all the time the best choice. In fact, a strategic exit depends on three key aspects: recognizing the signals that the time is right, diligently preparing the company for a smooth transition, and understanding when taking the reins could also be the wiser alternative.
1. Pay attention to the signs and recognize when it is time to leave
The decision to leave is not and has never been an easy decision that might be made overnight or in one meeting. This is a key moment that may have a financial impact on the entrepreneur and shape his future.
They say that point is of the essence and I cannot agree with that. Look for periods of favorable market conditions, similar to high demand for your particular industry or technology. Like my second enterprise, which took advantage of the booming big data market in home care, my departure coincided with favorable market growth. The decision significantly increased the company’s value.
It’s also necessary to realize that sometimes your skill set is now not driving your business forward. I experienced this which led me to bring in exceptional talent as my last company matured. This decision strengthened the company; If I hadn’t realized how my contribution had plateaued, the company would have had a hard time reaching recent heights. It’s comprehensible that you might feel that the most sensible option is to simply leave the company. However, returning to a mentoring role could also be a much higher alternative so which you could proceed to make strategic contributions without hindering the company’s growth. But again, this is not one other decision to be made flippantly; requires careful assessment.
2. Prepare your company for a successful exit
Before you get fooled by dollar signs, you would like to address one of the most significant elements of a successful exit that is often missed – due diligence. (*3*), the focus has been on the buyer due diligence process. However, it is equally necessary to vet the buyer. Research the buyer’s past acquisitions, conduct a “background check” of sorts, and get information on how their previous acquisitions have gone. If you possibly can, also contact their current employees. This doesn’t suggest you are a weird and paranoid salesperson; this only proves how committed you are to caring for the company even after its sale, ensuring its smooth operation and prosperous development in the future. After all, due diligence goes each ways. This level of research also allows you to understand their culture. One of the costly mistakes I made on my first exit was losing focus during the buyer’s due diligence process, which took 4 months. My company’s growth stagnated and our valuation dropped. Red flags are as necessary as dollar signs, so don’t think twice about walking away if their values clash with yours.
3. Develop a post-exit strategy to ensure continued engagement
An exit strategy can undoubtedly motivate many entrepreneurs – it is a great opportunity to make money and proceed their business. However, this mustn’t all the time be the final goal. Does money weigh greater than your legacy and vision? Maybe. But it’s your decision. Money is only one major factor in exit; For me it’s never the most significant thing. I value living my best life as an entrepreneur by ensuring that each one of my endeavors provide freedom for me and my family.
Let’s assume that you just have managed to build a company that runs easily without your constant intervention, and yet provides you with financial freedom and time to pursue other passions. In this case, I do not think selling could be the best idea. Personally, running and further developing a successful business also gives me great satisfaction, often more satisfying than a one-time payment.
But assuming you continued selling and quit, what happens next? You start with a different vision and you begin with recent strategies. Wouldn’t that burn you out? Would you’re feeling more fulfilled if you began once again, repeating the same technique of creating and selling for money? Maybe, perhaps not. The point is that you just need to come up with a plan after you get out that will not dim the light of your burning passion. There’s nothing incorrect with stopping and having fun with a well-deserved break. Don’t lose your north star; try to make your life more fulfilling by moving beyond money conversations.
Build a legacy, not only a series of sales
The definition of happiness and success can vary from person to person, depending on what motivates them to get up every day. Are you motivated by on a regular basis life? Or the challenges of building something from scratch? Regardless, you would like to do not forget that as an entrepreneur, success can even mean recognizing your limits and knowing when to stop. This goes beyond ensuring the future success of your creation and the dollar bills dancing in your head. Entrepreneurship is greater than just money. It’s about your legacy – learn to select lasting impact and personal success over high earnings.