Plan your exit strategy
Even if you plan to run your business until the day you die, I think planning an exit strategy is one of the smartest things you can do as an entrepreneur. That’s because the process of creating an attractive business for someone else to buy naturally makes it a better business to own. It will force you to consider things like how to improve retention, increase margins, and grow faster. All of that will mean more profit for you while you own the business.
One simple way to create an exit strategy is to do the same exercise I wrote about in the last story in this series: Imagine it’s 1-2 years from now and make a presentation explaining why your business just sold for $10 million. Doing this will force you to consider how someone would value your business and give you ideas for how to improve its efficiency.
Learn about bias
As I’ve shown above, one of your biggest challenges in creating value will be overcoming biases that prevent investment in the future. I’ve hardly scratched the surface of these biases and how to overcome them in this article. I encourage entrepreneurs to educate themselves on this concept and find effective ways of making better decisions. If you’re looking for a good place to start, read Ray Dalio’s Principles.
About the author
Hi! I’m Michael Thomas. After selling SimpleData I wrote stories for magazines like The Atlantic, FastCompany and Quartz and helped start a code school for refugees. Now I’m on a mission to fund ambitious social impact projects and help companies tell stories that inspire with new company, Campfire Labs.
Article images courtesy Campfire Labs