Working through economic shocks and exit. Featuring Cioran!

Consistent feedback into the Exit Motivations office from business owners and entrepreneurs regarding the current climate is a theme of toughness. Everything is tough. Still reeling from Covid global covid shocks and aftershocks, businesses now find themselves in a place where not only is business tough but their teams are finding things tough too. The cost of living crisis for staff has a direct influence on motivators and energy levels in the workplace.

It is often a shock that will jolt an entrepreneur from entrepreneurial inertia. And we have had three years of them. It is also the potential of a shock combined with a look to exit that may see maximum value from exit diminished. Almost holding on too long or not long enough. In exits, timing is everything. Especially to maximise value, whatever that, in a epistemological sense, might mean to the exiting party.

There is good literature regarding inertia. Sandri et al in 2010 researched exactly that with a study into the disinvestment choices of entrepreneurs and non-entrepreneurs. This studies risk and reward, timing and decision making. ‘Two alternative explanations are possible as to why individuals might postpone disinvestments: a rational account in line with real options reasoning as well as a behavioural account in line with a status-quo bias, inaction inertia, and other psychological phenomena leading individuals to generally postpone or even avoid action.’ The vast array of influences on timing are too great to count. These are especially magnified during times of economic duress and influence.

Nimble planning and options seeking is a primary goal of exit. We always suggest that you wouldn’t walk into a business without knowing how you would walk out. The same applies starting or scaling a business. What is the exit, how do I get out of the building?

Of course, there’s a balance on the risk reward front. Probably a great time to consider Emil Cioran’s thoughts around philosophical pessimism, specifically ‘On the Heights of Despair’ when in the moment of economy crisis and challenge. By considering many differing emotions of exit, whether ‘happy’ emotions or ‘sad’ emotions, an entrepreneur can continue to capture a sense of balance when making sound and informed decisions giving a potential plethora of viable solutions.

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