Entrpreneurs Share: Why All Businesses Need an Exit Strategy

Exit strategy
Plan from the outset where you want your business to go.

Perhaps to some it sounds a little pessimistic to talk about having an exit strategy for a business you haven’t yet started, however, an exit strategy is actually a very wise move. We talk all about the things you need to consider when starting a business in our Small Business Management Course, but of equal importance is how you’ll end the business, which is something you need to consider when writing your Business Plan.

How Will You End It All?

Knowing how you’ll exit your business when the time comes will determine a framework for how you’ll set up your business up in the first place. This could involve creating a name for your business, rather than using your own name, so that you can sell your business later without having to relinquish your right to use your own name.

Exit strategies have never been more important than they are today when it’s not uncommon for a start-up to be sold maybe two or three years after its inception. Take Flickr, the image hosting website, as an example of case in point; it was only 18 months old when it was sold to Yahoo! for $30 million in 2005.

Three Key Reasons to Have an Exit Strategy

We spoke to our network of fellow entrepreneurs and business owners recently, and they gave us three reasons every business should have an exit strategy.

1.    It gives you a roadmap: Mark Darling of Sip Water says: “Begin with the end in mind.” Operating a business without an exit strategy is like going on a road trip without taking a map. “How are you going to get there if you don’t know where there is?” The smaller things tend to fall into place much more easily when the bigger things have been decided.

2.    It’s motivating: “When you’re working towards a specific goal, it really helps you to stay motivated on those days when everything seems to be going wrong,” says Vic Cherikoff of Australian Functional Foods. Your exit strategy helps you to put certain problems in perspective.

3.   Get the best sale price: “Knowing when and how you will sell your business can help you think about what you need to do to maximise your business’s value,” explains Robert Crane of CIA OPS. Without an exit strategy, you may find yourself accepting fire sale prices just because you want to exit your business quickly. Having an exit strategy helps you avoid this.

Having an exit strategy is just as important as having a start-up strategy. But that doesn’t mean you have to follow it down to the letter. Like most things in life, often the best-laid plans don’t actually go to plan, but having a framework to work off will help to make your business more successful and ultimately, more profitable in the long run.

You can find out more about writing a business plan in our Small Business Management Course by clicking here.

Why The Business Name You Choose Is So Important: Interview

Choosing a business name that is Google-friendly is important.
Choosing a business name that is Google-friendly is important.

Our Small Business Management Course teaches students everything they will need to successfully start and operate their own small business, which includes how to write a business plan. Throughout the duration of the course and particularly, when it comes to writing your business plan, you’ll need to think about what you’ll name your business. So what does make a good business name?

What’s In a Name?

For this post, we spoke to a business owner whose business has a rather distinctive name: CIA OPS’s Principal, Robert Crane. CIA — or Computer Information Agency — OPS is a Sydney-based technology consultancy firm, which focuses on assisting businesses and individuals improve their productivity using technology and smart business practices.

The name CIA OPS perfectly encapsulates everything Robert’s business does — provide his clients with information about computer-related technology, such as how to streamline a business’s processes for use with cloud-based software or training in Microsoft Office 365 — but at the same time, it’s also a conversation piece.

“Everyone’s heard of the CIA, as in the USA’s Central Intelligence Agency,” Robert says. “So when they hear CIA OPS, they immediately ask me more about my business and what we do.”

Interesting – and Easy to Remember

But because the name CIA OPS has already aroused people’s curiosity, they’re more engaged and interested in what Robert has to say. The fact CIA OPS is also easy to remember is another added bonus.

“Even if they forget the ‘OPS’ part,” Robert says, “They always remember the ‘CIA’ part and the fact we work with computers, which makes it really easy for them to find me Google.”

Is it Google-Friendly?

Which brings us to another important consideration you need to make when it comes to thinking of a business name. Thinking of something quirky and interesting which also represents what your business does is one thing, but ensuring it’s Google-friendly is another altogether.

Google has, in many ways, fundamentally changed the way we do business — and as a result, it has changed the way people select their business name, too.

If your business name is too obscure that it becomes too hard to remember, then it won’t work; if it’s too common that it returns hundreds upon hundreds of Google results, it won’t work, either; if it’s too long, too short, too boring — won’t work, won’t work, won’t work.

“You really need to think about what you’ll call your business, because that is one thing that’s hard to go back and change later,” Robert says. Make sure you check to see if the business name you’re thinking of using is being used already, or is too similar to someone else’s — which could land you in hot water, as you will lean in the intellectual property and general law module of our Small Business Management Course.

Robert’s advice: “Avoid names that include the words ‘solutions’ or ‘networking’ — they’re boring, too common, and pretty obvious — you know, all businesses hope to provide some sort of solution, for instance.

“Be original, give your business name some real thought, and test it out on your friends and family first,” Robert advises.

Being that your business name is so important, we recommend that our small business management students start thinking about potential names as soon as they start the course, so than when it comes time to finishing their business plan, they’ll have something in mind.

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If you would like more information about our Small Business Management Course, click here. For information about the other courses we offer at EzyLearn, click here.