Get into business to get out of business

Entrepreneurs and small business people often end up with the business as a millstone around their necks. If you are in business because you like working, fine. Otherwise, make sure you go into business for the sole purpose of getting out again.

This means that your strategy must plan to make the business valuable enough that you can sell it, or profitable enough that you can make your pile and then shut it down.

These are almost opposites: if the objective is to sell then the business can lose money (preferably other people's) so long as it's desirability is increasing. Think: websites buying subscribers. Within limits of course: a healthy cashflow makes a business attractive to purchase. But do you think FeedBurner had a good cashflow when Google bought them?

If the objective of the business is to make so much cash that its residual value is irrelevant then the focus is on cutting costs and maximising margins. Think: selling e-books (many e-books are about a topic that is "hot", that has a limited lifetime).

Either way:

  • plan your exit strategy from the start
  • put it in place as soon as possible
  • and make sure you don't inadvertently break it later on

If there isn't a good exit from a business idea, then don't do it!

And don't get so involved in the day-to-day battle that you lose sight of it. Get in to get out, or you could be stuck in there forever.

Exception: nothing wrong with a nice business that looks after itself and puts a little money in the bank every month. Let it run as long as you are still grateful for the extra cash, then shut it down before it causes you grief.