Exit strategies are all the rage these days, and it’s pretty much a fantasy come true when you plan one that works without a hitch. Better yet… your strategy works and you walk away smelling like a rose, while the new business owner feels good about the purchase.
But then… there are failures that can’t be fixed, and the people who will look you straight in the eye, take your money, and tell you it’s a miracle in your pocket, while leaving you stranded on an island of failure.
How do you exit a business failure without succumbing to the disaster of life-ending financial ruin?
Back in the day, Kenny Rogers advised his listeners to:
Know when to hold ‘em,
Know when to fold ‘em,
Know when to walk away,
And know when to run.
Some thought he was talking about cards in a game of poker, and the man on the other side holding the side iron… He was not. He was talking about business ownership, and how you must have a plan.
How do you abort a business failure?
Some businesses are not meant to be. Did you really think all businesses would be successful? Way back when… I remember looking down the road and seeing an option for ending the business on the horizon, then realizing, some would stick it out.
Some would stick it out…
Charles was that guy. He had a dream and he wasn’t about to let it die. He wanted this to work, and he’d wanted it so bad, for so long, that he wasn’t about to leave without success, or personal demise. Sitting on the floor of the back room, we had just sold every single item in the building, and the end of the last pot of coffee was getting cold in our cups. He said, “I have $85 in the bank, and I know I can get a few items for that. We’ll list them on eBay in the morning, and that should give us enough to kick off the new sales plan.”
I remember hearing the gasp from my own lungs, as the feeling that he’d learned absolutely NOTHING from the past 24 hours returned full force.
Charles was willing to put everything he had into this business and watch it go up in flames again. I couldn’t do it. I was done.
Mary Beth stood up, slipped her bare feet into her shoes, dropped her empty coffee cup in the trash dumpster on her way to the car. He’d ended not only their business with an auction, but by refusing to let it go without bankrupting them, he’d ended their 32 year marriage. She started out at ZERO without him.
His dream sucked the life out of their marriage, and ultimately out of him, because he had no exit strategy, no means of moving past a failed business, leaving behind a failed dream, or exiting, without self-destruction.
Mary Beth’s story wasn’t the only story I’ve heard with such a devastating end. There are more. But that does not have to be the case. There’s so much more to the possibility of growing a business than holding on until you lose your shirt. You can close the doors, or let it go before that happens.
Let it go before it kills your dream…
Andy stood on the dock and waved to the drivers, pulling out with the last of his inventory. He’d returned his floorplan, and the doors were closing on a 24 year dream of a business. The keys to the building would be turned over to the new owners in three days.
As the sun set on his former life, a new life awaited on the other side.
His business location had been good, but not good enough to weather the low economic struggles of a community on the verge of collapse, and he’d seen the writing on the wall. He could close it down, or he could wait for total destruction. With the knowledge he’d gained over those 24 long hard years, he struck out on a new venture, encouraged by his ability to determine an end game, before he lost everything. His end game would include some consulting, and eventually another business venture with a better dynamic. He was prepared to let it go, to build something better.
His dream had spurred better and bigger dreams, and a determination to seek future aspirations with a dedication to fulfill his purpose of life.
His purpose was bigger than a failed dream.
Andy moved on to new ventures, building on his purpose with new dreams and dedication to fulfilling his life purpose, over and above the overwhelming disaster that could have been an overwhelming failure. He chose to let it go and move forward to bigger, better things.
Choose positive exit strategies over failure
Recognize the impact of changing realities, and know how to realign your own goals, efforts, and business plans to incorporate an exit strategy that can benefit you and your business. Failure isn’t a requirement. Learning life lessons can pre-empt a failed business strategy. Start your business with the realization that you can be open to changes, new ideas, concepts, and aversions that will come, and recognize them when they do.
Starbucks didn’t start out to be a $5 cup of coffee and an upscale WI-FI location. But change, a willingness to depart from the seductive enticements of a blatant logo, add product, and increase marketing opportunities shifted the elements of a skinny storefront in Seattle to a mega Franchise with mass appeal over 47 years. Not only do they breathe status symbol and excrete burned coffee beans, but anyone who’s ever visited a Starbucks knows they’ve taught the world a new language. Their exit strategy was growth and evolution.
In 1971 the concept of purchasing a $5 cup of coffee might have sent the world scrambling to stop choking on laughter. McDonalds was still handing back change for your burger, fries, and a drink. But a bag of over-roasted beans and a coffee grinder had an edge over the traditional Folger’s benefactors, and the ergo-centric dynamic of hippie hold overs and entitled wanna-bees were about to be born.
Overly educated artistic types were beginning to seek hangouts for their peers, and the world of writers and artists hanging out in coffee shops was about to become “a thing” that would change the face of working from home, starving artists, and “let’s meet for coffee” for a lifetime. The diner would never have any appeal for this coming generation of yuppies turned Boomers. And eventually the telling stride of those who avert retirement with opportunity, entrepreneurial ventures, and a desire to continue growing financial wealth would boost the dynamic to greater elevation.
Whether you’re pushing your business success to a strategy of shifting gears for the future, or allowing the doors to close while you move on to greener pastures, the reality is you need a strategy to apply as you exit each phase.
Growth potential is an exit strategy
“When God closes a door, He opens a window.” Or so they say… Have you ever witnessed otherwise?
On a foggy Sunday morning, the realization that working at home probably wasn’t going to be a forever option, because I didn’t have the ability to maintain a home with a separate home office in a neighborhood where customers could come to my home. I needed to shift gears, and continue to grow my business.
Meeting at the coffee shop worked until the coffee shop on a side street closed to become a drive through off the main drag, and I was pushed out of the backroom where I’d met many of my customers. The growth potential of my business evolved into a rented conference room and a 200 mile commute. I had options. They meant investment and growth.
When the doors closed on my tiny one man office, the windows overlooked a mountain view, and a sole proprietorship became a corporation.
What’s your growth potential? Do you have an exit strategy? Is your business viable for change? Will you survive the economic storm of the next season?
I’ve pointed out some of the questions you need to be asking as your business moves into the next phase of existence.
I’m hoping you’re planning ahead. I truly believe we can survive anything, when we plan well, and use good strategies for growth and change. Sometimes, those strategies mean closing the doors and moving forward with new concepts.
Yeah, let’s do coffee!