When I first started my writing business, the last thing I thought about was how it would all end. Still today, I find that I get so wrapped up in what I need to accomplish each day that I fail to consider what happens when I am ready to close up my laptop for good.
This is partly because, as a solopreneur, I’m responsible for every aspect of my business. I can’t ask someone else to take care of my work while I work on my exit plan. No such person exists. As a result, this task continues to stay on my to-do list. I tell myself that I’ll get to it when I have more time. This additional time, of course, never comes.
Plus, I’ve never really considered having an exit strategy important as a solopreneur. Do I even have anything to sell if my business revolves around me and only me? After reading Your Baby’s Ugly, a book about how to create a sellable business, I now realize that the answer to this question isn’t necessarily a no like I’ve always thought.
Exit Planning Isn’t Just for Large Companies
“Every business owner needs to have an exit plan,” says Justin Goodbread, CFP, CEPA, CVGA, the book’s author and a serial entrepreneur. In fact, as a Certified Exit Planning Advisor, Justin has built a business around this service. At Financially Simple, he works with owners of all sizes of businesses, helping them to better prepare for the life they want both while working and in retirement.
What about the notion that exit planning is only for companies that have employees? “If you’ve built the intangible assets of your business in such a way that someone is willing to pay you for it, then yes, you can sell your business even if you’re a solopreneur,” says Justin. For example, as a writer, I could create my own courses, books, or blog. These assets could then be sold with the business when I’m ready to retire, making it more appealing to a potential buyer.
Great! So, all I need to do is start bolstering my business assets and I’m good to go, right? Well, not exactly.
The First Step to Developing Your Exit Strategy as a Solopreneur
“Solopreneurs can sell their businesses for a profit, but nobody should ever place all of their eggs in one basket,” Justin shares. Instead, preparing to exit the business world actually begins with looking more closely at where your finances are on a personal level.
“Start by preparing your personal finances for your exit,” says Justin. “Build up your savings. Contribute to your retirement accounts. Make sure you’re doing something that will provide you with income outside of your business when you retire. Diversify your wealth outside of your business to reduce the risk associated with trying to fund your retirement with the sale of your business.”
This makes total sense. If I am not relying solely on the sale of my one-person business to retire comfortably, I am still able to have the life I want in my post-working years should this not occur. That is, as long as I set myself up for this with my personal finances.
Still, I’d love to sell my business for profit once I’m ready to step away. In Your Baby’s Ugly, Justin provides eight core areas of business that, if maximized, increases the likelihood that this will occur. Which areas are most important for us one-person business owners?
Most Critical Business Areas for a Solopreneurial Exit Strategy
The first is, obviously, your finances. “Creating avenues that maximize the ability of your sales and marketing to create a healthy revenue stream is so important. That’s how many of the speakers that travel the country operate. They may hire freelance workers to help them with booking and production, but it’s their ability to plan and get the most out of every dollar that enables them to be so successful.”
A second critical core business area for solopreneurs is planning. “This is because everything rests on your shoulders,” Justin says. “As a result, you have less capacity than a business owner with a team of employees. This creates a necessity to plan your time down to the second to maximize efficiency and productivity.”
Part of effective planning requires that you be honest about your business. This isn’t always easy as its founder because the business is your baby and everyone thinks that their baby is the cutest to ever walk the earth.
While this way of thinking is understandable—no one wants to look at their baby and think that is’ ugly—it may get in the way of creating a sellable business. How do you get a more objective look at your business when you’re the only one who’s in it?
How to Get a Realistic View of Your One-Person Company
Justin recommends that solopreneurs “get involved with a peer group, trade show, or even an advisory board. They can look at your information and help you with an assessment. Just because you’re operating as a solopreneur doesn’t mean you’re alone. You almost certainly have trusted peers that can help you take an objective look at the strengths, weaknesses, opportunities, and threats facing your business.”
What if you live in a remote area or don’t otherwise have access to people who may be able to help? “You can measure your business against your competitors,” suggests Justin. “There are many ways to determine your business’s attractiveness beyond those that exist internally.”
The Final Word
I have to admit that it’s pretty enlightening to learn that my thought process all of these years is more than a little flawed. It also gives me hope that I’m not creating a business that dies when I’m ready to close up shop. With the right approach, I can create a company that continues to serve clients long after I am gone. If this is news to you as well, Justin has a few final words:
“To me, solopreneurs aren’t that different from entrepreneurs,” he says. “Simply being on your own doesn’t mean you’re less valued, equipped, or that you’re less capable of being successful. There’s a reason solopreneurs have chosen to operate by themselves.”
“If they know what they want to accomplish and have a pathway to get there, they have all the same opportunities as entrepreneurs,” he goes on to say. “The path may look different. The timeframe may change. However, you’re a business owner, nonetheless. You have a product or service that you are selling, just like any other entrepreneur. Enjoy the journey!”
Thanks for the great advice, Justin. I think I’ll do just that.