3 Things You Need to Do to Have a Successful Exit

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3 Things You Need to Do to Have a Successful Exit

By Aaron Marcum | Edited By Micah Zimmerman | Entrepreneur Magazine | May 22, 2024

Extractive Summary of the Article | Listen

Building and establishing a company from the ground up is often the dream for many entrepreneurs — pouring their hearts and souls into their vision and watching it transform from an idea into a living entity. But sometimes, the end goal isn’t just to create but also to create with a successful exit in mind. A profitable initial public offering (IPO) or a strategic acquisition by a bigger company can be how the story of years of laborious efforts ends for many entrepreneurs, ultimately leading to financial independence.

Having exited two of his own companies and coached countless others through the process, the author has learned a lot of things in writing an exiting story. Sure, the financial rewards are undeniably enticing, but it is also important to recognize that exiting isn’t always the best option. In fact, a strategic exit hinges on three key factors: 

1. Pay attention to the signs and recognize when it’s time to exit.  Timing is everything. Look for periods of favorable market conditions, such as high demand for your specific industry or technology.  It’s also crucial to recognize that sometimes, your skillset is no longer the driver of your business’s growth – bring in exceptional talent.  Step back to a mentorship role could be a far better alternative so you can continue to contribute strategically without hindering the business’s growth.
2. Prepare your company for a successful exit.  Traditionally, the focus has been on the buyer’s due diligence process. However, it’s equally important for you to investigate the buyer. Research your buyer’s past acquisitions, run a “background check” of sorts, and get information on how their past acquisitions went. 
3. Develop a post-exit strategy for continued engagement.  An exit strategy can undeniably motivate many entrepreneurs — a great chance to cash in and move on. However, it shouldn’t always be the ultimate goal. Does money weigh more than your legacy and vision? Perhaps. But that’s yours to decide. Selling a thriving venture that requires least intervention may not be a very good idea.  Because selling it after your exit, what comes next? You start with another vision and start with new strategies. Wouldn’t it burn you out?  Would it make you more fulfilled to start over and over, repeating the same process of creating and selling for money? Maybe, or maybe not. The point is you have to develop a post-exit plan that doesn’t dim the light of your burning passion.

Build a legacy, not just a series of sales.  The definition of happiness and success may differ from person to person, depending on what motivates them to wake up every day.  Regardless, you have to remember that as an entrepreneur, success can also mean recognizing your limitations and knowing when to stop. This goes beyond ensuring your creation’s future success and the dancing bills in your head. Entrepreneurship is more than just money. It’s about your legacy — learn to choose lasting impact and personal fulfillment over hefty paydays.

2 key takeaways from the article

1. Building and establishing a company from the ground up is often the dream for many entrepreneurs — pouring their hearts and souls into their vision and watching it transform from an idea into a living entity. But sometimes, the end goal isn’t just to create but also to create with a successful exit in mind. A profitable initial public offering (IPO) or a strategic acquisition by a bigger company can be how the story of years of laborious efforts ends for many entrepreneurs, ultimately leading to financial independence.
2. Sure, the financial rewards are undeniably enticing, but it is also important to recognize that exiting isn’t always the best option. In fact, a strategic exit hinges on three key factors: recognizing the signs that the time is right, meticulously preparing your company for a smooth transition, and understanding when holding onto the reins might be the wiser choice.  And the final advise is build a legacy, not just a series of sales.

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Topics:  Entrepreneurship, Business Exit Strategy, Financial Independence, Legacy