Stop Focusing On Your Exit Strategy, Focus On Building a Great Company

If you are an entrepreneur, you have likely received advice about developing an exit strategy or a plan to sell your business for increased personal gain. So many entrepreneurs start their businesses already thinking about selling their company. And that is an attitude that customers, employees, and investors can sense.

If you are like most other entrepreneurs, you need investors to function. Venture capitalists will naturally want to understand potential buyers before they invest. But, the savviest venture capitalists want you to focus on building a great business with delighted customers while also being capital efficient.  

If you use all of your brainpower fantasizing about the ultimate sale, you have no room to focus on the aspects of your operations that matter. The reality is that your business will be more robust, more effective, and more efficient with you at the helm. 

Focus on starting and running a profitable business instead of planning your exit strategy. Here are five initiatives you should be focusing on instead of your exit strategy: 

#1. Providing a great product or service

You started your business with a purpose. It's likely because you have a product or service in which you are an expert. When you start your business, channel your energy into making your product or service the best it can be for your clients. Tailor your offering to their needs and use their feedback to improve your business.

#2. Generating business

You started your business with a purpose, likely because you have a product or service in which you are an expert. When you start your business, channel your energy into making your product or service the best it can be for your clients. Tailor your offering to their needs and use their feedback to improve your business.

Throughout the life of your business, increasing sales and generating monthly recurring revenue will always be a significant aspect of your growth. However, at the beginning of your operations, you need to invest most of your time, effort, and resources into increasing cash flow and connecting with potential clients. As your company's founder, you will likely devote much of your own working time to generating sales. So, be prepared to focus on that responsibly.

#3. Increasing efficiency to drive gross margins

There will be bumps in the road for any new business, but the first few months give you insight into increasing your efficiency. Use this time to observe your operations in every department and streamline them to increase your cash flow. How is each department run? Where can wasted time be trimmed from your operations? Could any new hires increase how efficiently your team is operating?

Look at the workflow from a closed deal to order fulfillment to receipt of payment. Ensure that you're removing any impediments that might cause inefficiency. As you do so, be cognizant of your customer service- so that none of your actions to increase efficiency negatively impact your customer relationships.

#4. Customer service

If you do not provide a positive customer service experience, securing returning clients won't be easy. Excellent customer service does not just mean being polite on the phone for a growing business. It means taking your new and potential customers' feedback into account when developing your product, sales strategy, or business plan. Listen to what potential customers want from your company and tailor your business offering to their needs. 

#5. Planning for the future

There will be bumps in the road for any new business, but the first few months give you insight into increasing your efficiency. Use this time to observe your operations in every department and streamline them to increase your cash flow. How is each department run? Where can wasted time be trimmed from your operations? Could any new hires increase how efficiently your team is operating?

Look at the workflow from a closed deal to order fulfillment to receipt of payment. Ensure that you're removing any impediments that might cause inefficiency. As you do so, be cognizant of your customer service so that none of your actions to increase efficiency negatively impact your customer relationships.

If you aim to build a successful business, developing a business plan for the next year, five years, or decade is an important exercise—set goals for your company concerning size, desired profits, and customer base.

Work toward these goals and get on the right path to achieving them. Your ability to meet these goals will directly impact your company's growth and overall success. Get into the habit of planning out your upcoming quarter(s). A 90-day plan that outlines revenue, product goals, growth goals, and more will be essential for the future. 

Build A Great Company, And The Exit Will Take Care Of Itself

At the end of the day, if you are focusing on turning over your business for a big payday instead of focusing on what makes your company great, you're probably not placing enough value on your business, and neither will potential buyers. You will actively do just that when you change your mindset to drive growth and long-term success. You may even find yourself enjoying the process of building your business.

To learn more about the strategies behind building a great company, schedule a 30-minute consultation today.