Many businesses have already solidified their growth and development plans for 2017, which likely include hiring and recruiting, expanding sales teams, opening new locations or even upgrading technology and other resources.
However, business owners and entrepreneurs may want to consider entertaining a different concept for growing their businesses, and that is an exit strategy. Before you burst out laughing or blow off the idea entirely, the reality is that in some cases an exit strategy proves to be the best strategy for spearheading company growth.
Read on to learn the reasons why and how exiting a business can actually help your business grow:
- Re-shifting Focus – After spending years or perhaps most of your life fully invested in your business, you’ve likely had new ideas come up along the way. However, because your business kept you busy in making decisions, overseeing production, and managing the day-to-day operations, you barely had time to see your ideas to fruition. By making the choice to exit your business, you now have the time to focus on new business channels, a brand new business line or even what you are truly good at.
- Cut Your Losses – If a part of your business is no longer profitable, then it may be time to consider whether or not you want to continue moving forward or pursue other paths and opportunities.Of course every business goes through challenging times, and if your business is your true passion, then you want to see it through the tough times. However, sticking with your business solely for the reason of “it’s just what you’re used to doing” isn’t enough. The business world is constantly changing and shifting, and it’s important to recognize when it’s time to cut your losses and move on, rather than accrue debt or lose money.
- Boost Your Bottom Line – Of course exiting a business may shrink your market, especially as prime stakeholders get wind of the news and shareholders begin to sell their stocks, however, the overall profit of the business may grow. If you decide to exit the business, and your business is sold to another entity or organization, this will give your business the opportunity to reinvent itself, enter into a new market, and even grow in a way that you didn’t think was possible.
- Discover a New Identity – By making the decision to exit a business, not only do you gain the personal and professional freedom to make your own decisions that are the right moves for you, for your family, and for your career (or for your retirement), you also leave your business in the hands of new leadership that will also discover a new identity for your business.
All in all, when we think of “business growth and development”, we often think of the action items or growth goals that we mentioned above, such as growing teams, opening new locations, and expanding product and service offerings. Not many business owners and entrepreneurs would think that an exit strategy would be an integral part of their business growth strategy. However, depending on the current position of your business, where you are in your career, and where you want to go, exiting your business just might be the best decision for future growth.
Nate Nead is a licensed investment banker and M&A advisor with InvestmentBank.com. Nate resides in Seattle, Washington. He assist company owners in working on growth toward a meaningful exit. He has assisted companies across a number of sectors including technology and software, real estate, business services and oil & gas.