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What do airlines and loan departments at banks have in common? Each
is a firm believer in having a well planned exit strategy.
Experience has taught both that when you need to get out, there is no time to
create a strategy. The plan had better be in place. Commercial
airlines are well known for teaching exit strategies.
The first thing they tell passengers after checking for fastened seatbelts is
how to survive after a plane crash. The flight attendants point out to the passengers
the locations of the emergency exits and how to use the bottom seat cushion as
a flotation device. The exit strategies for leaving an aircraft are
best identified well before the time arises that they are needed. I
became familiar with the term exit strategy while I was employed
as a loan officer. Lenders are conditioned to think exit
strategy before they even discuss terms with the borrower. A lender's exit strategy
focuses on the variety of ways that the bank can recover the loan principal on
a failing business loan. Examples for a rapid exit loan recovery are:
a mortgage, a pledged asset like a CD, a security interest in machinery or the
proceeds of a life insurance policy. The lender always thinks about when and how
the business transaction could end and how he is going to get the bank's money
repaid. The preferred exit strategy is to be paid off on a loan by sticking to the payment schedule
agreed upon at the loan closing. However, lenders learned long ago that the possibility
for loss on loans requires an exit strategy which considers the timing, process and sources
of funds to be paid in full. I
am sure there are other businesses that have exit strategies thought out and committed
to paper. Maybe, I will run across one or two before I exit from this business.
Too
many businesses that I work with or read about have no defined exit strategy at
all. An
exit strategy does not have to be a complex plan. It does require some deep thinking
and question answering. Consider the following points:
- Know why you are in business.
There could be one or many reasons.
- Know how high your highest
bar is.
- Know that it is acceptable
that your strategy may be that you never leave.
- Let key people around
you know of your intentions.
- Do what is right for you.
Too
many employees I know or read about have no plan for their career advancement
as time goes on. I know or hear about others who suddenly find themselves unemployed
by layoff or being fired. Imagine what an advantage it
would be for employees to have their own personal exit strategies for career advancements
and for retirement. Employees
are businesses also. Their company is their own set of skills for providing a
service. Just like the business owner, the employee can do some thinking about
the same points <LI< ol>
- Know why you are working
in the field you are in. There could be one or many reasons.
- Know how high your highest
bar is.
- Know that it is acceptable
that your strategy may be that you never leave.
- Communicate your intentions
when appropriate.
- Do what is right for you.
An
exit strategy can change as circumstances change. Don't
be afraid to change it. More important, don't be afraid
to create one. Your happiness may depend on it. I
help small business owners develop their planning skills. Creating an exit strategy
is included as part of the eight key strategies for more profit in less time in
small business. Would you like to know more? Click here.
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