Unless you are looking at your business as an investment and you have an exit strategy all you're doing is buying yourself a job, with your own money. Let me illustrate the point. My next door neighbor had gotten laid off at his job at Motorola. He'd been there for over twenty years and been there through it's hey day. He'd been given a nice six figure severance. On top of it he wasn't too far out from earning a pension. Certainly that's an excellent position to lose your job in.
But he was still a young man, able bodied and in his mid-fifties with lots of corporate management experience. I asked him what he was going to do next. He said he'd been working with a business broker to buy a business. Okay, I said. What business is appealing to you? A laundry mat was his reply. It was a good 45 minute to 1 hour commute from his home each way.
Really? I said. How much? He gave me a six figure number and said he thought he could grow the business side of sales. Wow, was my reply. I hope you're not buying yourself a job.
And indeed, that's exactly what he did. He worked tremendous hours with a pretty long commute for a 7 day a week operating business. Long story short, he sold the business at a loss a year later and went to work for another company. As an investment he had a negative return and to make matters worse it wasn't a passive investment either. He was very active in the business which means he basically donated his time.
I'm always amazed at how many small business owners don't have an exit strategy. They were so focused on the beginning they never considered the ending. An exit strategy is simply a time limit on how long you want to be in a business and how much money/return you want to get out of it when you're done. Any investment and I hope your business endeavor is looked at as an investment (of both time and money) really needs to have a time horizon and a return. The only exceptions are hobbies, volunteerism and legecy businesses (ones turned over to children).
If you haven't done it already you need to come up with an exit strategy.
- IN WRITING, put down the exact day, month and year you want to be out of your business.
- You now need to write below it the exact, to the penny, sale amount you want to get for your business.
- The final thing you need to do is list the top five things that are barriers to you achieving the date and monetary goal. Divide how many days you have left from your sell your business date goal and divide by 5.
- After each of your barriers figure out the date in that many days that you have to eliminate each one of your primary barriers.
- Hang your goals on the wall and look at them every day.
- Work on crossing them all off and enjoy your well earned retirement or next challenge!