The Essential Entrepreneur, 2nd Edition

CHAPTER 17Getting out of business

When starting a business, you must have a plan to get out of the business and maximise the business's value in the process. This is where some of the principles we've discussed in the book start to come together.

As your number of customers, revenue and profits increase over time, you're building value in your business, and at some point both you and your investors are going to want to realise that value. If investors are investing an amount of money today, they generally don't want that money sitting there forever. They will want to understand how you're going to add value to the business and then how they can exit the business at the increased value in a few years' time (usually a three- to five-year horizon) and make a significant profit. (Remember the investor pitch (presentation) described in chapter 11.)

Knowing who the target acquirers of your business are and how you'll make yourself enough of a nuisance to get their attention is key from the start. Disrupting and changing the way an industry operates is the ideal way of gaining the attention of large players in your industry. They will need to adapt their business if they are going to compete — which, if they are an old, established business and brand, could cost them an extraordinary amount of money. It may also take too long to change the existing culture and business model, and it may simply be more cost effective to buy the new upcoming business and brand and integrate into or ...