An Exit Strategy Is As Important As A Business Plan – Yet Few Entrepreneurs Talk About It

Business September 19, 2022

If you are a newbie entrepreneur and have an effective business plan in place, you also need to put an exit plan in place. Why? Because business acquisition can be a turning point in your entrepreneurship. It is no secret that your business will likely be acquired one day. Don’t get it wrong!

Your business acquisition can play a massive role in expanding your business module. Thus, you will double up your year-on-year revenue and annual sales. Similarly, you will hire numerous employees as you expand your business. At the end of the day, you will be the one to receive the revenue directly. So, as your business expands, your net worth multiplies. And so does your year-over-year revenue (YoY).

Elevate / Pexels / A well-thought-out exit strategy can change the destiny of your business.

All of these can only be possible if you have an exit strategy in place. What is an exit strategy, you may ask? Well, an exit strategy is a well-thought-out plan to let your business be acquired by investors. These investors will share their parts in your business – normally referred to as equity. But the good news is that they will actively invest in your business, and consequently, your business will expand massively. As for the investors, they will get their share. Thus, it will be a win-win situation for both parties.

Apparently, if you do not have an exit strategy in place, you will not avail these perks. To make the matter even worse, you may end up selling out your business and quitting your entrepreneurship. Of course, that is a worst-case scenario. After all, your business is like your child. You have spent many years in planning and executing your business plans. If it collapses, you will have no way-outs. That is why it is crucial to have an exit strategy in place – along with your business plan.

Fauxels / Pexels / If you have a realistic exit strategy in place, you will never see your business going down.

But the problem is that a very limited number of entrepreneurs talk about exit strategies. Especially, newbie entrepreneurs prefer not to talk about it at all. The truth is that no stable business can run smoothly without an exit strategy.

While an exit strategy is so important, the question is: Why do entrepreneurs not talk about it? Well, there are multifarious reasons for that. Now, let’s go ahead and see why most entrepreneurs remain tight-lipped about the most important factor: An exit strategy.

Andrea / Pexels / Newbie entrepreneurs are driven by false optimism and prefer not to talk about an exit strategy.

False Optimism

False optimism is commonplace among newbie entrepreneurs. This means they remain in a false hope that their business plan will work out – no matter what. They remain so consistent with their business plans that they even forget to make an exit strategy.

Sadly, all business plans do not make it to the end. At some point, they collapse. This is where an exit strategy comes into play. At this point, if you have an exit strategy in place, you can let some leading investors acquire your business for good.

With that said, we recommend you develop an exit strategy and your business plan. More importantly, talk about it openly. Discuss it with your team. And renovate the strategy accordingly. Consequently, you will not face any surprises if things turn south.