Exit Strategies and Why the End Should Start at the Beginning

By Helen Steel, Managing Director at Streamlion Consulting

When it comes to success in business, there’s a chapter people rarely consider. The end. The art of the exit strategy is the part of the journey which sets entrepreneurs apart from the crowd. But an exit strategy is not about giving up. It’s about building your business with purpose.

When you launch a business, you often find yourself swept up in a whirlwind of ambition and the last thing on your mind is the exit. But here’s the reality: the most successful entrepreneurs begin with the end in mind. For many, talking about an exit early in the journey can feel disloyal to the dream. You’ve just got started, so why plan to leave?

Some might argue that you’ve only been successful if you’ve exited with a return on your investment, ready to move on to the next, bigger and better opportunity. 

When it comes to business, we simply cannot afford to set ourselves up for failure. Which is why, oddly, one of the first questions I ask a founder is “What happens at the end?” I’m not for a moment suggesting that their business won’t continue, very successfully, for many years. But I am suggesting that they might not always be a part of it.

Some founders dream of ringing the bell on the stock exchange. Others are building with a strategic buyer in mind – someone who can scale faster or integrate the business into a broader portfolio. Others still want to grow a sustainable business that eventually supports a management buyout or family succession.

There are lots of choices when it comes to an exit strategy; the four most common are:

• Management Buy Out (MBO) – when an executive team combines resources to acquire some or all the business they manage.
• Outside Sale – a straight sale to new owners.
• Merger & Acquisition (M&A) – either merging with a similarly sized company or being bought by a larger one.
• Initial Public Offering (IPO) – essentially floating on the stock market and raising capital from external investors.

However, there’s no one-size-fits-all exit. The best strategy is the one aligned with your values, your business model and your vision. It’s this framing and planning stage which needs to come at the start to enable you to structure your business for ultimate success in whichever exit strategy you choose.

Determining the right balance between personal and business goals, as well as honouring any investment, requires careful planning. The key point of the strategy is to optimise the value of the business, so planning from an early stage provides maximum flexibility and opportunity.

Start your exit thinking early. It’s not disloyal. It’s smart. By acknowledging and acting on the need for an exit strategy, you are allowing yourself to grow even more in the future, as you have the chance to move on to greater challenges or more opportunities. In business, as in life, journeys are more successful when you know where you’re heading.