Planning a Home Business Exit Strategy
I mentioned, in a previous post, that sometimes you may find a particular aspect of your business is no longer viable and you have to make changes. Or perhaps you may decide to give it up entirely, feeling it has fulfilled its purpose in your life.
Des Walsh of b5media’s Business and Blogging suggested that it’s a good idea for home business owners to have an exit strategy.
By exit strategy, Des explained it’s not just a back up plan but is a plan for developing a business with intrinsic value or equity the owner can sell or pass along. Along this vein, business owners should be thinking of a succession plan so they have something more than time for dollars. Instead they have something with value to sell or bequeath when they decide they’ve had enough.
Some home businesses can be developed into ones that have salable value. Others depend solely on your ability to perform, or as Des described it, “exchanging time for dollars.”
For instance, my writing buisness depends on my being able to perform. My family can’t do it for me and when I don’t produce…my columns, my blogs, my books, the income ends. Yes, if I’ve written some books with long lasting appeal, there may be royalties coming in when I can’t write, but generally not for long.
When I operated a children’s quilted vest business, the income was based on my being able to perform the work. I did receive the business from a friend who decided she didn’t want to continue. I purchased the fabric and patterns she had on hand; but she didn’t charge me for the knowledge about her markets as she could have. Some businesses can be built up so you receive a profit for the market you’ve developed in addition to your materials.
When developing your home based business, you may want to consider:
*Will this business be one that depends solely on my being able to perform? Perhaps my family will help or I may eventually hire other home workers. Will I develop it into a business that I can bequeath to my family or sell? Or will it remain one based on my performance?
*Will you, from the start, set up a business plan that enables you to build equity?
*Does your business depend solely on your unique talent? Or will you be able to train others to continue when you can’t or want to sell the business?
These are just a few of the items to consider as you plan your home business.