What’s your exit strategy for your company?
Re-phrased: How far do you want to take this business before you tap out as CEO?
In my legal practice, when we form and advise companies, we ask what the founder’s EXIT strategy is – at formation AND at growth points throughout the company’s lifecycle.
Sounds contradictory, right?
But, knowing this from the outset allows us to co-plan as service providers for the best strategy for the next 2-3 years, and set the right foundation.
The most common Exits are as follows:
- Scale quickly & sell the company within 3-5 years. Sell or be acquired.
- Grow a sustainable business, retire and leave as a legacy for heirs to manage. Transfer company.
- Create a “lifestyle” company that pays for the founder’s lifestyle as long as needed. Then dissolve.
Your situation may be different or a combination of the above. But, defining this early on allows you to work with a definable strategy.
For example, if you plan to scale quickly with investors within the next 3-5 years, you may want to pick the right corporate structure and jurisdiction, that would make your company attractive to potential investors in the future. Understanding the tax ramifications and hiring decisions all flow from that point.
Chew on this: The beautiful aspect of knowing your exit, is that you can PIVOT AT ANY TIME. You can convert or dissolve your structure or amend it to reflect your NEW exit strategy.
It’s just more paperwork, but DO-ABLE.
This week – envision what your company would like in 1 year, 2 years, 3 years and 5 years.
WHERE WILL YOU BE?
Running it as the CEO or off on a yacht on the Aegean Sea? Or both?
Ask yourself these questions every 6-12 months.
Then pivot, as needed.
Don’t get bogged down with “analysis paralysis”. Pick your end goal. Then work backwards.
To your profitable exit,
CEO of Biztoco