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February 26, 2004
Do not rush the exits
Although exit planning is important for all entrepreneurs (every good thing eventually must end), too many entrepreneurs view their business like a publicly traded stock. Jeremy Wright offers an example that is so common among many entrepreneurs: get in, get out, move on. Not only is this often financially unwise for the entrepreneur, the impact extends well beyond personal finances. Free enterprise involves a social contract that requires some level of responsibility by entrepreneurs to their communities. The quickest road to increased regulation of business is to ignore the role of stewardship that all entrepreneurs have in our economic system. And quick exits that focus only on short term financial gains move regulation and government scrutiny into the fast lane.
Posted February 26, 2004 12:38 PM
Comments
I am in agreement that there is no reason to rush the exit strategy for getting out of a business. However, just as strategies are constantly evolving to meet the needs of the marketplace, they must be open to an earlier than anticipated exit. Having a long term exit strategy is great, but this should also have contigencies regarding potential scenarios. If I as a business owner am approached with an offer for my company for an amount I hoped to get many years from now, I will likely take it. There are also possibilities that I may be able to keep partial ownership if I choose to continue running the company. Long term strategies are best for entrepreneurs, but having an idea of what you would do if the market changes or offered a bid for your company must also be thought of.
Posted by: Mike W. at March 11, 2004 06:25 PM
Exit strategies can be kind of tricky subject. Can you every truly know when the best time to exit a business is? I don't know. It seem that the risk is always prevalent that you could be leaving money on the table. This seems to be just one of the things an entrepreneur has to deal with. Like the stock market examples in the article, a stock may look like a great opportunity and turn out not to be or a stock may take off beyond anyone's expectations. Exit strategies can be compared; you just never know.
Posted by: John O'Bryan at March 18, 2004 02:55 PM
at Belmont University in Nashville, Tennessee. He consults with a variety of businesses on start-up and growth related issues, and with larger corporations on re-establishing entrepreneurial cultures within their organizations. Dr. Cornwall's current research interests include entrepreneurial finance and entrepreneurial ethics. He has authored or co-authored four books.
