Finding Your Freedom: The Ultimate 5 Steps to a Profitable Business Exit Strategy
Summary: You woke up at 5 a.m., downed your coffee, and jumped into the grind. Your business is your baby. It's what you've nurtured from a mere idea into a tangible entity.
But, it's also your retirement plan, and with each tick of the clock, you wonder: How do I make sure my exit is as triumphant as my entry?
This isn't just an article. It's a blueprint for your profitable business exit strategy.
We will unravel the five key steps to liberate you from the clutches of constant work, turning your business into an asset that serves you, even as you plan to step away.
The Problem: The Golden Cage
Remember Joe?
You two attended the same business networking events when you were both starting. Joe's business took off like yours, but then he hit a wall. He was trapped in a golden cage of his own making—profitable but not scalable.
He couldn't see beyond the day-to-day operations.
What happened when Joe thought about a business exit strategy?
He panicked.
Don't be like Joe.
Time Waits for No One
Every day you aren't thinking about your business exit strategy is a day your potential profits, freedom, and legacy could be slipping away.
In your heart, you know it's a race against time, compounded by rapidly evolving market dynamics and life's unpredictability's.
This is your wake-up call.
The Ultimate 5 Steps to a Profitable Business Exit Strategy
Step 1: Get Your Financial House in Order
Let's be clear—any successful business exit strategy begins with a clear financial picture.
That's where we come in. It’s rare for the financial house to be ship-shape, and only 35% of business owners have prepped the business's financials, profits, and cash flow to sell.
Why is it so important to start here? Two great reasons.
First, unless you want to sell your business for pennies on the dollar, you need an effective business exit strategy that strengthens your financial position today to maximize your selling potential.
Second, getting this right now has so many benefits for the business and you as a business owner.
By getting everything performing to the best level, we often do amazing things like double and triple our client's personal compensation while hiring a team, investing in benefits, and bold growth moves.
Imagine not feeling that you have to choose between your dreams and your pocketbooks.
Improved profitability isn't about numbers on paper. It's the freedom to invest in growth while building a healthy, financially secure organization that is attractive to buyers.
Step 2: Assemble Your Dream Team
You need the right team around you to build an enduring business and a profitable exit strategy.
If the thought of a large team is enough to send your blood pressure sky-high, you can relax. Not every business needs 100 employees to be successful.
These days, there are more flexible ways to build teams that maximize productivity yet minimize stress and your managerial workload.
We’ve taken many of our clients from being the chief of everything to elevating their role in the business to visionary and strategist.
For example, one of our clients came to us with a goal to spend a month-long honeymoon with her new husband without the stress and worry of running the business, answering emails, phone calls, or texts. Could you imagine a month to unplug from your business totally?
Within 9 months, the team was on board with the plan, cross-trained, and empowered to take on those daily tasks. When our client returned, we called to check how things went. She shared, “Well, Sunday night, I sat down to dig into my email. I grabbed a glass of wine to calm my nerves about what I would see. You’ll never believe it. I had 236 emails. None were about a problem; they were about keeping me in the loop. It was amazing. No one contacted me on my trip, and the team delivered. I started Monday looking forward to getting back to business.”
That is freedom you can enjoy today, but also builds value in the business. If you stay stuck in the day-to-day, you’ll diminish every other part of your business exit strategy.
You also benefit by creating a strong company culture and a team that loves their work. Bringing you more joy and less stress while setting the stage for your exit.
Step 3: Plot Your Course with a Bulletproof Strategic Plan
For the clients that work with us to create their exit plan, we hear time and time again that our approach really stands out as we place an emphasis on high-priority, high-impact items.
This is integral to any robust business exit strategy.
Our approach also has a layering impact that balances quick wins you can celebrate while you build bolder moves that take your business to the next level.
The struggle you are likely facing is what to do first and how.
Did you know that there are over nine strategic areas that are proven to scale businesses profitably without burnout?
There isn’t a one-size-fits-all approach.
Each company has different needs and needs a customized answer for the business, yourself, and your goals.
Every client we work with gets a customized strategic plan that looks at the big vision and one-year goals.
Then we map out the quarterly focus to achieve those goals. We bring the whole team, even while you are growing, into the process so that your team understands where they are headed and why but can plug in and contribute to the business's overall success. Who should be involved? Everyone is generally our answer.
Again, this isn’t about you doing all the things - it is about building a business that can be successful because of a fabulous team.
A finely tuned strategic plan can dramatically accelerate your path to a lucrative business exit and help your business create predictable growth and profits you can trust.
Step 4: Build a System, Not Just a Business
Many entrepreneurs miss this key component of their business exit strategy—establishing systems.
We’ve already talked about them in Steps 1 to 3.
Did you see how they are woven through the very fiber of your business exit strategy?
Too often, business owners avoid creating systems and processes because they feel their work is too custom, too complex, or simply because the idea feels too complex even to get started. We recommend applying a philosophy of “what is simple gets done.”
Start simple and build from there instead of tackling everything all at once. Rome wasn’t built in a day, and your systems won’t either, yet every day can be better than the day before.
One of our current clients is in the manufacturing space. As a small and nimble team, they could do amazing things. But, as the business grew, they reached out to us as more and more balls began to get dropped. This caused frustration as the owners began dealing with the costly mistakes and spent their days putting out fires instead of being able to focus on growing the business. We brought the team together and involved the team in the first iteration of documenting the end-to-end process.
We started with a process that involved every team member and filled all four walls of the large conference room. That was an amazing accomplishment, yet what happened next was even better. You could see the light bulbs going off right and left. “I really need to know that. Can you send that to me when it’s my turn?” “Oh my, I’ve been feeling like I’ve been on an island, but now I understand the part I play and why what I do is important.” As the comments came in, each team member felt more respected and responsible for their part.
Note this can be a challenging conversation to facilitate as an owner. That’s why my team and I stepped in to fill the gap. We could act in the business's best interest yet skillfully bind the team to the higher goals while addressing their fears and concerns.
A business that runs itself is far more attractive to potential buyers, enhancing its value and profitability. A team that is engaged makes work more enjoyable, and systems mean you can be more productive with the resources you have.
Step 5: Execute, Monitor, and Tweak
You need more than a plan. You need an execution of a business exit strategy that is constantly tweaked based on performance metrics. This is your business exit strategy's finishing touch.
Two key considerations here are key performance metrics and transparency.
Nothing should be a surprise in your business.
You should not be surprised by success or failure - you should see it coming from a mile away.
You shouldn’t be the only one who knows this.
If anyone earns money from the business, they should be aware of their impact and even be rewarded for their contributions.
When we’ve established steps 1 through 4 for your business exit strategy, this process of continuous improvement is how we manage progress, create a positive and motivating tension for progress, and, most importantly, celebrate success.
With continual assessment and adjustment, you ensure your business is ready for a profitable exit and could fetch a premium value.
Begin Now, Because Later Might Be Too Late
The triple benefit of a profitable business exit strategy pays you regular compensation, profit bonuses, and a substantial sum when you sell.
If you think you have time, remember a well-planned business exit strategy takes 3 to 5 years. One year to solve problems, another to solidify those solutions, and a three-year history to show your business is a golden opportunity, not just a golden cage.
Ready to exit your business like a legend? Your profitable business exit strategy awaits. Let’s talk about your business exit strategy. Simply reach out and find time on my schedule. You've spent years building this business; spend the next few years ensuring it's your ticket to freedom.
If you enjoyed this article, check out Doing What’s Right For You in Your Business.
