So you’re going along, getting your business plan together, envisioning the amazing things that will happen once you get the funding. Then you get to the section where you need to address your Exit Strategy.
Exit Strategy? What a downer.
I know, I know, we don’t ever want to think about it, but the truth of the matter is every good business plan has to have an Exit Strategy.
When I asked one of my clients about his Exit Strategy, he said, “Let’s not talk about that because it’s not going to happen.” Even the most knowledgeable and savvy clients will hem and haw when it comes to discussing their Exit Strategy.
But let’s be realistic: even with the most optimistic outlook, things can and will go wrong. Wouldn’t you like to decide on a plan of action now, when you’re calm and rational, rather than when those problems come up? How many good decisions are made when your blood pressure is rising and your heart is pounding a mile a minute?
On another note, it shows your investors that you’re really thinking things through and don’t have your head entirely in the clouds. A good Exit Strategy grounds your business plan in reality, which will make investors take you more seriously.
Your Exit Strategy doesn’t have to be overly complex. It can be as simple as “If I don’t make X amount of dollars by a particular year, I will close up shop, sell off the merchandise on eBay, and do something else.” Sometimes you can even save your business with a good Exit Strategy. One client of mine decided that if his business didn’t take off, he would go into a related market instead that still used his skills and materials.
It’s this kind of forward-thinking that makes the difference between your business possibly going under and becoming a success. Think of your Exit Strategy as your lifeboat. If the ship goes down, you still have a way to survive.