Business exit strategy…"What is that?", you might ask. It is the general direction that you want to follow that will prepare the business for you to leave when your objective is achieved. If you are like many small business owners, your strategy might be simply to provide you with income until you reach the point that you want to retire.
You might want to pursue the strategy of building an asset, that will appreciate in value, you can sell in the future. For some that sale might be through a public stock offering. For others, it might be a company that operates smoothly enough that it can function without you, making it something worth buying by a future private owner.
A third popular strategy is to create a business that will run effectively without you that you will continue to own. Many business owners are beginning to recognize the value of this strategy.
If you currently draw $100,000 per year from your business to support your lifestyle, you have a couple options. If you sell your business and invest the principle at a 10% return, you must have $1,000,000 to sustain a $100,000 a year income contribution. On the other hand, if you can design the business to require a minimum amount of your personal time and attention, you can continue to draw the $100,000 from the business for as long as you want.
Perhaps, one of the most exciting examples of the third strategy being explored in the business community today is Tim Ferriss’ discussion of the 4-Hour Workweek. He explains how he went from Working 80 hours per week to earn $40,000 per year to earning $40,000 per month working 4 hours per week. His book titled “The 4-Hour Workweek” describes his journey.
If you would like to hear Tim live, he will be interviewed by famed business marketing expert, Joe Polish. You can listen in on your phone for free:
*The 4-Hour Workweek: Secrets of Doing More with Less in a Digital World*
Date: This Wednesday, May 30
Time: 10 a.m. Pacific/1 p.m. Eastern
Make sure you hop on the call early!
You're about to find out what a world-record holder in tango, a national champion in Chinese kickboxing, and the owner of a multi-national supplement business have in common...and how he has so darn much free time!
If you read this message after that date, you have a couple other options that I can suggest. John Jantsch of Duct Tape Marketing did a great podcast recorded interview dated April 23, 2007.
Or see Tim's Blog.