The 5 Exits Of A Business
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80% Of Businesses Fail In 10 Years...
If you’d like to beat the statistics, then read on to discover the 5 ways you must “exit” your business to get to the next level.
Most small businesses fail because the owner is doing too much of the technical work and not focused on building the business.
You trade being an employee for more “freedom” where you end up working more hours (and often for less pay).
But you can achieve true business freedom by achieving the following 5 “exits”, which turn your small business into a big business that runs without you.
But if they do get results, the problem is a lot deeper than that…
The 5 Exits Of A Business
An “exit” is the technical term for selling your business.
However Roland Frasier points out that there are 5 exits of a business if you want to scale.
Each of these exits create more leverage and will enable you to work less and make more money.
As Michael Gerber popularised, they also allow you to spend less time working “in” the business, and more time working “on” the business (and eventually “above” the business).
Exit #1: The Technical Work
While you are probably great at the technical work, it is the lowest paid work in your business (yes, even if you have a high education level like an accountant, dentist or lawyer).
Therefore, if you spend all your day servicing clients then you will never be able to grow your business (and will always be chained to working “in” the business).
And so the first step is to make sure the marketing, sales, and finance areas of your business are running effectively so you can start to hire a team (or grow your existing one).
It also means putting systems and processes in place so your team can perform the technical work to your high standards and keep all your clients happy.
Exit #2: The Functional Management
In any company, the managers get paid more than the technical staff because they know how to leverage the efforts of multiple people to get more results.
But you can also hire or promote A Players into your leadership team to create more leverage for yourself.
Each of these leaders should be better than you at their functional area of sales and marketing, operations, or finance… so you're no longer the bottleneck for decision making.
It allows you to share the load and despite the popular media sensation around entrepreneurial leaders, all successful companies are driven by a team rather than one specific individual.
Exit #3: The CEO Position
The CEO position receives the highest salary because they are in charge (with their leadership team) for the strategic direction of the company.
It’s a demanding position where you need to be on the top of your game, but if you enjoy working in your business then you might want to stay in this position for a long time.
However, eventually you’ll want to retire or sell the business which requires you to step out of this seat (and companies sell for a much higher multiple without an owner/operator in charge).
By exiting this position, you can also remain on the board to assist with the governance while working on other businesses and investments (or just taking early retirement to play golf, travel or spend time with your family).
Want To Follow The Path To Freedom?
The 4th exit is leaving the board and the 5th is finally selling the business.
So there is a clear pathway to follow which enables you to maximise your company's value and reclaim your time in the process.
If you’d like to find out more, please request a call with us so we can help you design a Client Acquisition System for your business.
Then we can help guide you through these steps as your Growth Partner based on a revenue share agreement (where your success is our success), and together we can build a highly profitable (and valuable) company together.