Scale Up for Exit.

‘I want to exit in 10 years and sell for 10M’.

This kind of statement is not uncommon in SME’s with owners of owner managed businesses. It is, however, a great conversation starter to ask probing questions behind the motivation to exit. Together with an understanding of any scale up requirements an exit conversation is usually driven by intrinsic motivation as part of a process that has seen a jolt from cruising or entrepreneurial inertia.

From an academic perspective it is quite easy to get lost in the ontology of nouns. What does exit mean to you? What does exit mean socially, globally, theologically, philosophically. But does it matter to anyone else but the exiting owner?

The binary truth is yes. In this case there was a requirement to implement an incredible growth curve to achieve the numbers. The numbers, which on probe, diminished quite dramatically, due to discussion and what exit meant from a process perspective but also from a sociological perspective. What could the power of the funds harvested on exit mean, what they could do and what they would provide.

Of course exit in this case depended very much on taking the team on the journey to exit. But are you open with your team? Do they want to come with you on that journey? Are they happy with inertia? Is entrepreneurial inertia an oxymoron or a negative thing? An owner leaving an owner managed business presents a multitude of challenges, not just P and L and balance sheets. Cyclically these create thought challenges in the exiting mind that may cause an exit strategy change from an arable farmer producing a crop for sale to that of a shepherd nurturing his flock. One does not necessarily create a more seamless journey, and transition, than the other.

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