For many entrepreneurs and startups, two primary goals are to create a successful business and make money. Seems simple enough, right? However, while these are valid ambitions, it is important to think even further down the road. Every business should have an exit strategy so that you have a clear picture of the long-term goal you are working towards.
Early Exits are Happening Today
It may seem silly to begin thinking about the “end” while you are in the process of creating a new business, but did you know that many companies are now being sold only two or three years after they were started? YouTube was sold after two years for $1.6 billion, and Flickr was sold for $30 million after a year and a half. Of course, not every business is going to sell quite this quickly. But with the potential of an early exit, it is imperative for new businesses to have an exit strategy in place so that you can take advantage of any opportunities that come about.
The Exit Can Make You a Lot of Money
Details such as marketing campaigns, product development, market research, and employee relations are all important factors that require their fair amount of time and attention in order to develop a successful business. While these efforts will make you money, a carefully planned and executed exit strategy can make you even more. How much more? A good exit strategy has the potential to increase the entire value of a business by fifty percent – or more! That is a staggering amount that cannot be left to chance.
You Can Work Smarter with an End Goal
Having a clear end goal in sight can enable everyone involved with a business to work smarter by putting things into perspective. If you have a price and target date in mind, your exit strategy can be simple and effective. For example, “Our goal is to sell your company for more than $5 million by 2020.” It’s as easy as that! Now everyone can work hard and efficiently to reach that end goal in the specified timeline.