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An Exit Strategy, Why your Business Needs One

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You are starting a Small Business, you’re excited to be an entrepreneur and it’s an exciting time albeit nerve-wracking time.

This business is your baby, you birthed it from the most intimate parts of your mind.

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Now, let’s talk about giving it up. 

What is an exit strategy, do you know? 

It’s your plan to sell the ownership of your company to Investors or maybe another company! It’s basically a way of washing your hands of your business, and possibly if successful make a nice chunk of change. 

From Day One this strategy needs to be clearly defined ESPECIALLY if you want to attract potential investors. They want to know “How am I going to get my money back and make a pretty penny?” 

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Contrary to some entrepreneurs’ belief, Investors aren’t giving you money because they like you, they want to make that sweet sweet money. No matter what percentage of your business you negotiate to give away to investors, how fast they make their money back and how much return they see is a slow drip done overtime, but if you sell off the company (exit) they can make a substantial profit almost immediately. 

One of the most interesting (in my opinion) recent exits is the story of VitaminWater.

Rohan Oza, from Shark Tank, worked at Coca-Cola. He left a very well paying position to be an early adopter of VitaminWater… a very risky move. He helped build VitaminWater to an astronomical valuation, which ended up being sold to Coca-Cola for 4.2 Billion (straight cash homie – in my Randy Moss voice).

This is why it’s imperative to always have some type of Exit Strategy. If you are an established small business owner and don’t, do it. Today. Start coming up with ways to give that baby away, and make some money. 

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Brandon Brooks
Brandon is an entrepreneur focused on helping others start or grow their small businesses through his crowdfunding platform Inventrify.

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