As a Serial entrepreneur, for over 35 years, I have been involved in many different products, services and businesses; with one common factor, ”if it was meant to be successful, it was up to me”.
Being the driving force in sales, business development, product deployment and organizational structure is an all-consuming endeavor, however doing it with dedicated people makes it somewhat easier and more rewarding. Having the right people in your business will provide your customers with better (more accessible) service and attention, provide you with time & freedom while running your business and potentially an “exit strategy”.
Many entrepreneurs fail to see the “forest through the trees” when it comes to an exit strategy, thinking they need to do it all themselves. Then one day they wake up and realize that their business isn’t as “valuable” on resale, or there isn’t anyone qualified to take it over; leaving them nothing to show, for a lifetime of work.
My experience has been a fortunate one, in which I had family who chose to join my business, offering me a “built in” exit strategy. Even if you don’t have family involvement in your business, you can achieve this by focusing on your exit strategy and making it a priority. Hiring experienced industry personnel, recruiting from colleges and or developing leaders from “scratch” are great starting points to be able to develop the right person to take over your company. Additionally, letting family friends know about your desire to create an exit strategy and that you are looking for a “protégée”, puts it out to your network.
There are always ways to find people looking for advancement and opportunity. Be willing to pay well to start, then when earned, even better as they evolve into a leadership role. It’s not an overnight process, be committed to the long haul for your benefit and theirs!
What follows are 5 simple ways entrepreneurs can develop an exit strategy:
Offer equity to key staff
Equity can be given in many forms, some of which including common stock, preferred stock, phantom stock or simple profit sharing. It can be earned over 5 years (e.g. 1% a year over 5 years and only vested after 5 years.) Check with your accounting professional to determine the best route for you. Keep in mind, it’s not just about money, it’s about how people feel and how they see themselves in the future.
Talk about your future plans with your key staff often
Make them aware of your exit strategy, set obtainable and achievable goals to initiate the plan. The vision has to be clear, exciting and lead to a viable business. The people you are developing are probably not “entrepreneurs” like you, therefore, it up to you to show them what the future holds in your business or industry for them.
Develop a culture, with guidelines that can run without you engaged
Operation manuals, policies, procedures and philosophical understanding needs to be part of your future development plan. By letting your staff learn by doing, over time they will know it as well as you do, and handle situations the same way you would.
Take more time off, over time
Allow your people to “take the helm” while you are away. It’s been said that “nothing grows in the shadow of the mighty oak”. Let the sun shine on your team, trust their decisions and accept that they will make mistakes, they can always be corrected (if not, that is a very are powerful learning experience.)
Let your staff know, when you do eventually leave, you will still be collecting a check and their first job each week is to “deposit that check into your account”.
When you want to “retire” you don’t have to sell the business, which of course you can do, if thats your strategy. Some businesses provide for the owner, by keeping them on the payroll, and the future growth income/profits go to the new management team. Your exit strategy can share in that growth or just keep your income for your life or as part of your estate.
The key is to have a plan, it can be 2 years, 5 years, 10 year or even 20 years away, but the plan needs to be in place. Running a race without a finish line can be exhausting, especially as we get older. When you are 30, you might think you will work forever, when you turn 50, that view point changes fast!
Again, I am fortunate to have trusted, dedicated and very capable family (and some very strong, trusted “key people” who have earned their way to the top) by engaging in my business. Once my “exit strategy” was set, it all came together.
About the Author:
Joe Grushkin is a serial entrepreneur for over 35 years. Currently, as the CEO, President and Founder of MaxExposure Social Media, the premier Social Media & Reputation Management Firm on North America, he is growing the business with effective leadership skills and developing a management team to lead in the future. MaxExposure assists small and media sized local businesses in over 80 industries. More information is available at www.MaxExposureSocialMedia.com