A lot of female entrepreneurs are so busy working in the business, trying to grow it and improve it, that oftentimes, they’re not taking the time to figure out what it is they actually want. On the other side, once they get to that point of what they determine as success, what does that look like? Do they keep going and hustling until they’re 65 years old? Or do they have an exit in mind?
In today’s conversation, Jim Erben is talking about building a business with the exit in mind. Jim is one of the most highly sought-after “exit and succession” experts for privately-held business owners. His leadership has been recognized by the Inc 5000 list for building one of the fastest-growing companies in the nation, Erben Associates. Listen in to know more about Jim’s proprietary method called “succession by design, not default.”
Here are some power takeaways from today’s conversation:
- Why women make better entrepreneurs than men
- Why Jim chose a niche practice
- When you should think about having an exit strategy
- Why men are more fearful to exit than women
- Common mistakes entrepreneurs make that inhibit their ability to exit
- What an emergency operating plan entails
- How to determine what your business is worth
[06:50] When You Should Think of Having an Exit for Your Business
Nobody’s helping people figure out how they want to get out of their business, whether they want to sell to a third party, transfer to their kids, or key executives. They go about their day-to-day and week-to-week, not necessarily thinking about what the exit looks like on the other side. But the time you should be thinking about having an exit for your business should be yesterday.
[09:09] Why Men Are More Fearful to Exit Than Women
Everyone’s fear when they retire or exit is that they run out of money, especially men, who are so wrapped up in their businesses. It usually becomes their identity. On the contrary, women have so many interests beyond just having a business. It doesn’t mean they’re not passionate and they don’t care about the business. But they have kids to take care of and they’re doing all other stuff. They’re social and very charitable. And so, they don’t get emotional about their departure.
[12:38] Common Mistakes Entrepreneurs Make that Inhibit Their Ability to Exit
There are a lot of entrepreneurs that are so focused on working in their business instead of just working on the business. There’s this mindset that if they’re not the ones doing the work and building the hours, no one else could do it as much as you did. It’s very important for you to have clarity around what you want, whether it’s a monetary figure or a time figure. Once you know what you want, you start building towards that and once you know where you’re going, it becomes a lot easier to adjust. If you don’t know where you’re going, you’re just going around in a circle in your sailboat wondering why you’re not getting to a destination.
[19:45] – [20:07] Success by Design, Not Default
Everyone’s going to have an exit, including a horizontal exit. As Paul Simon said, there are 50 ways to leave your lover but there are not that many ways to leave your business. If you don’t have a plan by design, you will eventually have a plan by default. Somebody makes you an offer and it’s not enough. And you get distracted, because you don’t know what the numbers should be. Because you’ve never had your firm value.