Most businesses aren’t designed with an exit strategy. They’re not set up to sell, and they’re not set up for success.
Did you know that there are 31.5 million small to midsize businesses in the United States? That’s at least 31 million people with the entrepreneurial spirit, all of them striving to create something out of nothing — to provide solutions for people, provide a service, or create a groundbreaking new product out of thin air in their effort to realize the American Dream.
I feel a real kinship to these people. After all, I’ve been there myself. The blood, sweat, and tears, the all-nighters, the red-eye flights — all designed to create a better life for my family and the lives of my team members. I’ve made some mistakes along the way, but I’ve also created massive success. These experiences have given me insight that can help other business owners avoid some of the pitfalls and reap the rewards faster.
The danger of the key person-dependent business
You see, of those 31.5 million small to midsize businesses in the U.S., about 25 million of those are single employee businesses. That’s 25 million people who, if they don’t learn to grow and scale their business, will never be able to sell, retire, and enjoy the hard-earned fruits of their entrepreneurial labor.
Why? Because these businesses cannot function — in fact that cannot even exist — without the owner managing the business’s day to day responsibilities. They’re setting a trap for themselves that they may never escape…unless they devise and implement an exit strategy.
Want investors? A buyer? You need proof of your value. Build a team. Then get out of the way.
You see, most investors want to see in the clearest of terms (i.e., financials, marketing analytics, operational strategy) that the business they’re investing in is as plug and play as possible. Your passion is creating a successful business. Theirs is investing in businesses that have proven track records so that they can duplicate that success. Otherwise, why would anyone want to invest in or even purchase your business?
As soon as it is financially feasible for you to do so and as soon as you’ve perfected and documented your financial and operational strategies, you should focus on building a great team. Groom your highest performers to take on your day-to-day responsibilities. Transition from an owner-doer to an owner-investor, and use your passive income for long-term investments like real estate to create even more passive income for yourself.
Look for the people who have achieved the kind of success you seek. Align yourself with them. Learn all that you can.
Am I making it sound too easy? Well, trust me, I’ve been through the hard stuff. Plenty of times. A key component in achieving your vision of success is who you’re surrounding yourself with.
If you want to create, scale, and exist a business effectively — if you want to be able to take one, two, three bites at the apple, income-wise — then you need to align yourself with other people who have done it, too.
In my 30+ years in business, I’ve amassed an impressive network. But, like anyone, I had to start at the beginning. The advantage you have now that I didn’t then is the incredible access you have to people through social media. Every industry. Every level of success. And they’re all just a few clicks away.
Surround yourself with people who have done it, with people who want you to succeed versus those who don’t have the same positive growth mindset you do. Just recently, some colleagues I’ve known for over 20 years sold a five-year-old business for over $400 million. And this is the second time they’ve achieved this incredible feat.
I’m thrilled for them. They’re changing the lives of so many people through their success, and they’re inspiring me to always keep going because they’re showing me what’s possible.
But here’s a key detail I want you to remember: those colleagues designed this business with their exit strategy built into it. Their vision wasn’t to grow old working in the business, or that one of their kids would take over, or that things would just “work out.” Their vision was a comprehensive one. Yours should be, too.
If you want to learn how you can improve your operations, scale, and implement the right exit strategy for you, then you need to attend our next 10X Exit event. Invest in yourself. Invest in your future. Everything is possible. But you need to take that first brave step.