When businesses start, they don’t think about the end. You think about your website, launch dates, branding, all the fun stuff. The things that are going to help you start earning revenue. However, one of the best pieces of advice we can offer is to start a company with the end in mind. And if this company has a brick-and-mortar location then you need to think about the physical real estate that you are purchasing (or leasing). This may seem as if you’re expecting the worst, but thinking this way–with the end in mind–helps you plan to be successful. You should always have more than one exit strategy, because each life situation calls for a different action; and you should be thinking about worst case scenario.
When you start a business, or even if you’re in the middle of it, you should ask yourself:
- Why am I starting this business?
- Will it be a brick-and-mortar location or fully online?
- How long do I plan on owning this company?
- Will I purchase property to own or lease?
- If I were to sell my business and/or property, how will the sell affect my taxable income?
- If I were to see my business and/or property, how will the sell affect my clients, investors, employees, etc?
Once you have answers to these questions, you can start coming up with various exit strategies depending on the scenario. For example, if you suffer from a severe illness that inhibits you from continuing to run your business, will you have a power of attorney to make decisions for you based on your wishes? If you simply want to retire, will pass it down to family? Friends? The other board members? If your business is suffering and not making as much revenue, do you want to sell? Or do you want to propose a deal with a larger company to envelop yours? Will this include the property? Or do you want to rebrand your company and repurpose the property? With each answer, there are more questions until you have several exit strategies to help you and your business be successful while in practice and at the end.
All these questions then need to take into consideration your values. Because your company’s values are what propels your success. No matter what you decide as possible exit strategies, you need to make sure that they’re in line with your values and your company’s values. This is what we call “value-driven new business solutions”, because for every potential problem it can be solved with value-drivens solutions.
As Chosen Industries was defining what it was we do, the single biggest question was what to do with the remaining commercial real estate assets. Our first client was a weapon ammunitons company and they were in the process of phasing out. As we spoke to the client we had a lot of questions for them: Did they want to repurpose the building? Starting building an exit strategy? Are there other opportunities or do they sell? After several questions and conversation we realized that the struggle was not in the phasing out of one world, but to understand what options could be next. That necessity started my foray into the world of developing innovative solutions with commercial land assets. Most real estate investors look for real estate brokers that sell the property, as if that is the only option. I quickly realized that there isn’t much thought into adaptive reuse or finding a way to repurpose the building. Most business owners, and proprietors, don’t know how to search for exit strategy consultants (fear of cost or because of the lack of how to find someone in their network). In the case of the defense contracting firm, the owner knew me and therefore entrusted me with the responsibility of developing exit strategies and offering value-driven new business solutions. Opportunity arrived through trust in the relationship. Focused but innovative solutions were delivered by way of understanding their goals. The firm became a client and Chosen Industries was launched.