Planning a Home Business Exit Strategy
I mentioned, in a previous post, that sometimes you may find a particular aspect of your business is no longer viable and you have to make changes. Or perhaps you may decide to give it up entirely, feeling it has fulfilled its purpose in your life.
Des Walsh of b5media’s Business and Blogging suggested that it’s a good idea for home business owners to have an exit strategy.
By exit strategy, Des explained it’s not just a back up plan but is a plan for developing a business with intrinsic value or equity the owner can sell or pass along. Along this vein, business owners should be thinking of a succession plan so they have something more than time for dollars. Instead they have something with value to sell or bequeath when they decide they’ve had enough.
Some home businesses can be developed into ones that have salable value. Others depend solely on your ability to perform, or as Des described it, “exchanging time for dollars.”
For instance, my writing buisness depends on my being able to perform. My family can’t do it for me and when I don’t produce…my columns, my blogs, my books, the income ends. Yes, if I’ve written some books with long lasting appeal, there may be royalties coming in when I can’t write, but generally not for long.
When I operated a children’s quilted vest business, the income was based on my being able to perform the work. I did receive the business from a friend who decided she didn’t want to continue. I purchased the fabric and patterns she had on hand; but she didn’t charge me for the knowledge about her markets as she could have. Some businesses can be built up so you receive a profit for the market you’ve developed in addition to your materials.
When developing your home based business, you may want to consider:
*Will this business be one that depends solely on my being able to perform? Perhaps my family will help or I may eventually hire other home workers. Will I develop it into a business that I can bequeath to my family or sell? Or will it remain one based on my performance?
*Will you, from the start, set up a business plan that enables you to build equity?
*Does your business depend solely on your unique talent? Or will you be able to train others to continue when you can’t or want to sell the business?
These are just a few of the items to consider as you plan your home business.
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POSTED IN: Business Blogging, CheckList, Personal Experience
2 opinions for Planning a Home Business Exit Strategy
Des Walsh
Nov 20, 2006 at 5:09 pm
Mary Emma
Glad you found the thoughts worth quoting. One thing I find with people who have really interesting businesses that actually could be documented as a saleable business process, so to speak, is that they baulk at documenting what they do, not realizing that for someone new to business what the established business owner does is pure mystery. If people are concerned that they wouldn’t know how to write a manual about their business, do what one guy I know does, get someone to video everything you do, from how you set up your desk, to how you organize mailouts etc. You could talk about invoicing, how to deal with bad payers, making cold calls, all the things that some of us have spent years learning the hard way. That video (or videos) could be priceless for a prospective buyer, especially one without business experience. Mind you, as some home biz owners like to work in their jammies I would suggest dressing up a bit! Then you could contract someone on elance.com or rentacoder.com to watch th video, get some quick notes and samples from you and write you a manual. And if a lot of what you do is online you could make videos of that with Camtasia (30 day free trial).
Mary Emma
Nov 25, 2006 at 7:55 pm
Thanks, Des, for your comments and input. You always have some good insights into home business.
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