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What’s Your Exit Strategy?

Exit Strategy

In a recent conversation with Arnold Sanchez of Archonomist, an Orlando based VC group and accelerator program. A comment came up that was worth sharing. When asked about the type of entrepreneur himself and those involved in startups his firm invests in, he said “we want people who always have projects going on and whose ventures are not their end goals”. Perhaps, his intention was to state that serial entrepreneurs are the ones that truly catch his attention, but he also stated during his course in our Secret Academy that if the entrepreneur’s goal is to finish his project only to enjoy its rewards, it’s usually not someone who he has a lot of interest in. So here’s how to plan out and setup a powerful exit strategy

Every VC thinks differently, and every investor has his own ways to look at their investments, and by no means is his outlook wrong. It is simply different from how I see things from the other side of the window. I, myself, invest in people both monetarily and through partnerships, but often look at their model from the complete opposite from which Arnold and his firm look at theirs. I look for people who want lifestyle and are highly motivated by it, and more importantly, people who share the sentiment that life is too short to simply work all the time.

While this may look like I seek lazy people, it is far from being the case. Instead, I look towards individuals who agree that residual models and automated revenue models are the only way to go, which leads me to my next point: why working sucks!

Exit Strategy and Passion For Your Business

When you work for a company other than your own, there are only two alternative endings to the situation you put yourself in. Early termination or late retirement. While these may seem harsh, they are exactly why the idea isn’t as appealing to new entrepreneurs who would rather struggle to make it on their own rather than try working for others. While working a 9-5 may not seem ideal or aligned to your long-term goal, it often is a better alternative for entrepreneurs who don’t seem to understand the concept of entrepreneurship from a holistic standpoint. If the saying holds true that entrepreneurship is working 10 years of your life like others won’t so you can live the rest of your life like others can’t, then perhaps many entrepreneurs do not understand that entrepreneurship and business ownership are significantly different concepts.

In our About Us page, we discuss in large that entrepreneurship is about innovation. Innovation is not always about creativity, but it is sometimes about your ability to look at something from a different lens. This may not always seem innovative to you, but it is to those who do not see the world from that same perspective or lens — prospective consumers and others including fellow entrepreneurs and investors.

Throughout your entrepreneurial journey, you will likely realize that working for yourself can be significantly more difficult and less rewarding monetarily than making it up the ranks working for others. At that point you must ask yourself why you would ever want to do that without an exit strategy. Arnold and I did agree that an exit strategy is one of the most fundamental aspects of what makes a good revenue model, and a great entrepreneur will pay attention to that important detail, because ultimately the goal is to not to replace a 9-5 with a 7-10, but rather to invest your efforts and time to build a self-sustaining revenue model and business structure that doesn’t need you as part of it, a key aspect of living within the Third Circle.

Can You Sustain Your Revenue Model?

Many entrepreneurs today create businesses only to make income and revenue, often forgetting to look at the bigger picture, which is their ability to sustain that revenue model by itself. As a result, their role is not to lead a business, but rather to engineer a new way to do business, regardless of what field they may be in. It is ultimately that engineering or blueprint that others become interested in buying and expanding through vast resources.

My uncle, as wise as a man he is, never understood the concept of expansion and business engineering. So when he decided to open a restaurant, his end goal was simply to create income for his family rather than to build a franchise which he could license to others in the future. His mistake was ultimately the lack of an exit strategy, which ultimately made him lose his business as the work was no longer worth the effort and time that he spent there. His mentality was that of a business owner rather than that of a true entrepreneur.

Entrepreneur vs Business Owner. What Are the Differences?

A business owner trades his time for money, which is no different than working for someone else except for the ability to choose how many hours you trade for money and when to do so.

An entrepreneur, on the other hand, engineers systems to ensure that his time is used to create wealth and then learns how to residualize so that time no longer becomes what you trade for money. This option allows for long-term sustainability and expansion, especially if an acquisition takes place, which allows you to walk away with a major sum of money that could be used in a variety of ways. A lot of people with finance backgrounds often become entrepreneurs because of their early understanding of this system when dealing with investing money.

Any real established entrepreneur will tell you that the journey always involves an ending, and that ending is only the beginning of your true journey as an entrepreneur. The real question remains… what’s your exit strategy?