Launch your business with an exit plan

Have an exit strategy in mind.

As Steingold poignantly asserts, “a new business doesn’t come with a guarantee (pg. 359).” Whether you ascribe to the optimist’s can-do attitude or the pessimist’s arguments for low success rates, all agree that entrepreneurship isn’t the path of those who wish for structure and security. This reality shapes the way entrepreneurs must think about entering into their venture. An individual who accepts a salaried position at a local business need not plan an exit strategy to protect herself from losing her life’s savings, but every entrepreneur ought to.

Communities need entrepreneurs to generate value, and entrepreneurs need to stay in the game long enough to generate it. When entrepreneurs bank everything on their first venture and it fails, they rarely have the opportunity to try again. Because the startup attrition rate is so high, it serves entrepreneurs and their communities better to have a long-term view of value generation that includes multiple attempts rather than a single magical success. For this reason, entrepreneurs must go into their ventures with an exit strategy that won’t cripple their chances at another attempt.

Although Steingold states new business has no guarantee, the same holds true for old business. Old business just dies slower (usually). Entrepreneurs benefit when they don’t take their venture for granted, but that applies to my individual contributor role too. I’m often reminded that my company, even though today it occupies the undisputed place at the head of the industry, has no guarantee. Whether it’s total bankruptcy or only a pivot which removes the need for my position, there’s always a risk I will no longer have a place there. Even employees need an exit strategy.

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