An exit strategy isn't a sign of lacking commitment to a business — it's a genuine part of responsible business planning, giving you a thought-through path forward for a range of scenarios, including eventual success.
Consider Exit Planning From the Beginning
Thinking about eventual exit scenarios early, even for a business you plan to run for a long time, shapes decisions about structure and growth in ways that make a future exit smoother if or when it happens.
Understand the Range of Possible Exit Scenarios
Exit scenarios range from selling the business, passing it to family, winding it down, or bringing in new leadership. Understanding which scenarios are genuinely plausible for your situation focuses your planning.
Align Both Partners on the Eventual Vision
Partners should genuinely agree on what an eventual exit looks like, since differing unstated assumptions about the business's long-term future can create significant conflict later.
Build the Business to Be Genuinely Transferable
A business overly dependent on one specific founder's constant involvement is harder to exit successfully. Building systems and processes that don't require your personal, ongoing involvement increases eventual exit options.
Understand the Financial and Tax Implications of Different Exits
Different exit scenarios carry significantly different financial and tax implications. Understanding these in advance, rather than only at the point of actually exiting, allows for better structural planning.
Revisit Your Exit Strategy as Circumstances Change
An exit strategy appropriate for an early-stage business may not fit a more mature one, or changed personal circumstances. Periodically revisiting keeps your exit planning genuinely relevant.
Communicate Exit Planning With Relevant Stakeholders
If the business involves other stakeholders — employees, family members, investors — appropriate communication about exit planning, at the right time, helps manage expectations and reduces disruption when an exit eventually occurs.