Exit Strategies and why the end should start at the beginning

Exit Strategies and why the end should start at the beginning

When it comes to success in business, there’s a chapter people rarely consider. The art of the exit strategy is the part of the business journey which stands entrepreneurs apart from the crowd.

Some would argue that you’ve only been successful if you’ve exited with a return on your investment, ready to move on to the next bigger and better opportunity.

This is the third and final blog in my three-part series about how to Aim Big, Think Big and Act Big. These are the three essential steps to guaranteed business growth that I spoke about in my first blog of the series.

So, how do we Act Big? I’d like to take you back to my little dog, Baxter, and his very big stick. I guess Baxter has the luxury of not needing to worry about where his big stick journey goes. To me, there’s a clear failure coming, when he realises that half a tree isn’t the best thing to decide to carry on a long walk. But, he’s living in the moment, and very happy to do so.

When it comes to business, we can’t afford to set ourselves up for failure. Which is why, oddly, one of the first questions I ask a business founder is “What happens at the end?” I’m not for a minute suggesting their business won’t continue, very successfully, for many years. But I am suggesting that they might not always be a part of it.

Unlocking the door

There are lots of choices when it comes to an exit strategy, the four most common are:

  • Management Buy Out (MBO) – when an executive team combines resources to acquire some or all of the business they manage;
  • Outside Sale – a straight sale to new owners;
  • Merger & Acquisition (M&A) – either merging with a similarly sized company or being bought by a larger one;
  • Initial Public Offering (IPO) – essentially floating on the stock market and raising capital from external investors, not as popular as it once was, following the bursting of the dot-com bubble;

There’s no ‘best’ option as the right strategy will be the one which fits your business and personal goals. It’s this framing and planning stage which should come at the start of the business journey to enable you to structure your business for ultimate success in the exit strategy you choose.

Determining the right balance between personal and business goals as well as honouring any investments needs careful planning. The key point of the strategy is to optimise the value of the business so planning from an early stage provides maximum flexibility and opportunity.

By acknowledging and actioning the need for an exit strategy, not only are we fulfilling the need to Act Big, we are giving ourselves the opportunity to grow yet more in the future as we have the chance to move on to greater challenges or more business opportunities.

 

How to Think Big and Create Sustainable Business Growth

How to Think Big and Create Sustainable Business Growth

This blog is the second in my latest mini-series which shares 3 essential steps to guarantee successful business growth

Last time, I wrote about Aiming Big. This time, you can find out how to Think Big and create sustainable growth for your business.

Clarity is Key

One of the secrets to business success is to ensure that your audience knows and understands what you do. By picking a market or a skillset and sticking to it, you create a much stronger brand and you can then grow your business under that brand in such a way that the goodwill you generate will extend to everything you offer.

By moving between markets or offering random services that aren’t linked together by a common skillset, you risk confusing your target market and the confused mind always says ‘no’.

Think Quality, Not Quantity

If you find you get the biggest buzz from the ‘new’, you need to hear the story of Rand Fishkin, founder and former CEO of Moz. Today, Moz is one of the most successful SEO companies in the world but that wasn’t always the case.

Fishkin describes his obsession with ‘the new’ as “one of Moz’s most consistent, most pernicious failures” under his leadership of the business. Instead of continually improving and refining his offering by focusing on what Moz was good at, the entrepreneurial founder was continually chasing the next big discovery. He wanted to repeat his original experience of finding a problem, solving it and becoming a huge success.

However, this chase led to many new product or features being launched, marketing and then promptly forgotten about. There was no support, no upgrades (both of which are essential in the tech industry), until everything came to a head with severe product failures and what Fishkin describes as “nightmarishly bad customer feedback”.

It was at this point that Moz’s growth rate plummeted from 100% year-on-year to just 20%.

A Lesson Learned

In the end it took years to turn Moz around, something which happened under new leadership. But the lesson was learned by Fishkin, who says he plans to carry it with him for the rest of his career.

In my experience, a successful business is something which needs strategic thinking. By considering why you are successful – presumably because you are good at what you do – and planning to deliver more of the same rather than diversifying or over-expanding and risking the whole business.

Next time, read more about how to grow your business successfully as I look at how to Act Big and what choices are available to business owners once they’ve found success and growth.