There are many suggested ways to gain financial success in business; you’ve read about that hundreds of times before. What you may not be aware of, however, is how to transition out of your business while continuing to reap financial benefits.
Serial entrepreneur, investor, and Founder of VentureFund.io & Progressly, Clarence Wooten, will join SVP, Business Banking, U.S Head of Treasury and Payment Solutions, Leslie J. Anderson; and the founder of the LM Group, startup adviser and co-star of Oxygen’s Quit Your Day Job, Lauren Maillian at the 2016 Black Enterprise Entrepreneurs Summit to help you find diverse exit strategies for your business, from acquisitions to sales to IPOS, that will make you walk away happy.
BlackEnterprise.com caught up with Wooten at a past Black Enterprise Entrepreneurs Summit to see what he had to offer on successful business transitions. Here’s a little of what he had to say:
- Know the value of what your company represents and to whom. The more you recognize the value in your company, the more leverage you have when presenting what your company has to offer to potential acquisitions. As a startup you should be considering and planning for your exit the moment you enter. “Think forward to the future, but enjoy the journey while you’re on it,” Wooten said.
- Create an ideal business structure and agreements with founders that accommodate end goals.
In transitioning your business, be sure to find the proper balance in agreements on who earns what based on value added and stage of business growth. “You have to look at a business like an asset,” said Wooten. The goal is to turn a grape into a watermelon,Wooten added. “I’d rather own 20% of a watermelon than 100% of a grape.” - Don’t ignore the value of timing. Consider what and how your business is doing in relation to where the market is going. Use factors like company value, potential value, and current company outlook to help gauge how a larger entity may have a better infrastructure to take your business to the next level if you’re looking to sell.
- Don’t hold on too tight. Deciding on an exit strategy in your startup planning stages can help you to keep your eyes on the prize. Avoid getting so emotionally attached to your business that when the time comes you’re reluctant to move forward. Remain focused on the end game.