Why you shouldn't delay working out an exit strategy

Throughout his 17 years in the finance industry, Andrew Stevens has taken on a variety of roles under a host of economic conditions. The national business manager for Nectar Broker Brands told MPA that, some years ago, when he was a business coach, he was contracted out to several broker businesses that wanted to devise an exit strategy.

“A number of the brokerages I was contracted out to when I was self-employed were those who suddenly had to retire,” he said. “They would come to me and say ‘I need an exit strategy’. And I would say, great,’ we can work out a three-year plan to bring in new blood or to outsource different processes or to turn you from the person transacting in your business to the person managing your business’.”

The business owner would reply that due to unexpected circumstances, such as ill health or family concerns, they only had three months before they had to get out.

Too many business owners put off creating an exit strategy until they are nearing retirement – a mistake that could be costly if the unexpected were to occur.

Read more: Four things you must do to ensure your start-up survives its first year

“What really needs to happen is, every business should have a really solid exit strategy that involves what their business would look like without them,” said Stevens. “The best way I can explain it is the relationship someone should have with their business is the same relationship a parent has with their child.

“When a baby is a first born, it thinks it is its parent and it’s almost hard for them to realise that it’s not. But then you need to support that child and help that child form its own identity that’s outside you, that is separate to you and eventually that child should leave home and be able to stand on its own.

“It’s the same with building a business.”

Stevens said business owners should be working towards their business having an identity that is separate to them, so that eventually the business starts to give back. That way, the success of the business won’t always rely solely on the owner.

Kate McIntyre is an online writer for Mortgage Professional Australia. She has a wealth of experience as a storyteller and journalist for a range of leading media outlets, particularly in real estate, property investing and finance. She loves uncovering the heart behind every story and aims to inspire others through the artful simplicity of well-written words.
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