Author: Matt Tognini
In my dealings with business owners, I am often asked to give advice about the direction of their business. In doing this, I ask a generic set of questions that range from topics about financial issues to lifestyle ones. The one question that almost always draws a blank or a puzzled look from my clients is “What is your end game?” Basically, what is your exit strategy?
The majority of people go into business and start working hard to build that business, but do so with no defined result in mind other than to make some money and grow. The issue here is that the decisions we make in business will differ depending on where we want the business to end up and what we want our role to be in that business. If there’s no defined end point or target, it is impossible to work toward that goal. The result is, the business ambles along not really going anywhere in particular.
The first thing I do when meeting new clients wanting to go into business, is quiz them on their motivations and their strategy to eventually exit the business. This doesn’t mean they are looking to be out of the business in a fortnight, it could be a long term target of 15-plus years, but it is a target nonetheless. For most SME owners, their business is the biggest asset they have. It is the asset they put the most effort, time and money into.
It is therefore important to be able to, at some point, harvest that business for its value. This might be for retirement or for the purpose of moving onto something different. Not having a set plan will affect the decisions that are made in the business and will inevitably make it take longer to get to where you want to go.
Over time the ‘end game’ may change. Life and business have a way of throwing us curve balls both positive and negative. However, not setting out a road map at the start, (or when you have read this and realised that you need to :) ) will more than likely result in the business not achieving what it could or should.