There are multiple reasons why preparing for the eventual exit of your business is crucial. First, planning for an exit allows for a smooth transition of ownership and control. Whether you’re selling the business, or passing it on to a family member, having a well-thought-out exit strategy ensures that the business can continue to operate effectively and profitably, even in your absence.

But what if you don’t want to actually sell your business? Most entrepreneurs don’t realize there are 5 different stages of exiting you need to be aware of and prepared for.

Not a reader? Not a problem. Listen on Spotify instead. 🎉

The 5 Exit Stages Of An Entrepreneur

Stage 1: Exit The Line

Eventually, you and most entrepreneurs will want to exit some part of their company, even if they don’t want to sell. A large percentage of business owners, including myself, are what’s referred to as ‘accidental entrepreneurs.’ You’re wearing all the hats, and you’re responsible, directly or indirectly, for every single facet of your business.

You’re the one on the line selling your services, and most likely, providing the services that you sell. You must create an exit strategy to help you get out of the spot where you’re doing everything if you have any hope of scaling. This starts with delegating. Recruiting the right talent and learning how to properly delegate, not relegate, to your team who are guided by well-documented systems, an established and compelling culture, and some proper coaching and management, is how you exit the line, the first stage of your exit.

Stage 2: Exit The Staff

Now that you’ve exited the line, you’ve achieved your first exit by becoming the manager. Congratulations! 🎉 This is one principle that Michael Gerber outlines comprehensively in his widely acclaimed book, ‘The E-Myth Revisited.‘

Out of the 300+ books I’ve read over the past 10 to 15 years or so, Gerber’s is on a short list of publications I’ve read that opened my previously closed eyes and provided so much transformation, I had to re-read it 3 or 4 times.

Now that you’ve exited the line, it’s your role, as the manager, to spend more of your time working on your business rather than in it.

The next seemingly logical step is to move from delegation to leadership. And many entrepreneurs feel as though they’re achieving this by claiming the title of CEO. But most entrepreneurs who call themselves CEOs are not, they’re operators.

If you can’t take a 12-month sabbatical and come back to a business that’s performing equally as well or perhaps thriving even stronger since you left, then you’re an operator.

But whether you’re a true CEO or an operator claiming the CEO title, it’s time to start thinking about your next exit.

Stage 3: Exit The Org Chart

How do you get off of the org chart? At this point, you still own the company. But it’s time to no longer maintain a title and a job description. This is where you move from management to governance by promoting yourself to the board of directors.

You’re now going to be responsible for supervising the company. This is where you start working above the business, rather than in it or on it. You’re no longer thinking of selling the products or services or widgets that your company offers.

You’re now going to be spending more of your time working on selling your business.  The business itself is the thing that you want to sell. Beautiful! Now you’re on the board. But the next exit stage is when you can exit the board.

Stage 4: Exit The Board

Once you’ve exited the board, you’re completely free of any operational or supervisory responsibility to the business. Do you know what you are now? You’re an investor. And now that you’re an investor, the business becomes one of the companies in your portfolio.

Stage 5: Exit Ownership

Not everyone wants to sell their business. But whether or not you want to actually sell or not, it’s still a wise choice to get your business to what’s called ‘exit-ready.‘

Whether or not you’ve decided that you want to sell your business, I’d still like for you to be ready to do so. If you’re thinking like a true investor, you want your company to perform well, right? Of course, you do.

The more your business is fully optimized to sell, the healthier your business will be, and the better it will perform. And if you HAVE decided to sell your business, this is where you finally exit ownership with what is hopefully a big payday, and you move on to your next enterprise launch.

Or… so you can spend all day just soaking up some seaside sun while sipping adult beverages and sifting sand through your toes, Jimmy Buffet style.

But what now?

Most entrepreneurs have no idea how long it takes to sell and exit their business. Even more tragically, they have no idea how to (A.) Optimize their business to get the highest possible valuation on their EBITDA (Earnings Before Interest, Taxes, Depreciation, & Amortization) or SDE (Seller’s Discretionary Earnings), and (B.) How to get the highest possible multiple on their valuation.

But it doesn’t have to be that way. You’ve worked too hard and too long to not get every single penny that you deserve for all your sacrifices and risks you’ve taken. We can help.

About the author.

Brian Webb is a 22-year entrepreneur, private investor, business & profit growth mentor, a B2B marketer, and the host of the Business Growth Show podcast.

In addition to managing a growing portfolio of businesses, Brian is the CEO of the award-winning marketing and business growth consulting agency in The Woodlands, Texas (Greater Houston Metroplex), Whatbox Digital, LLC.

You can find Brian on Apple, Google, Spotify, Pandora, iHeartRadio, and Amazon. Brian’s writings have been published and featured on NBC, ABC, CBS, FOX, and MarketWatch, and has been approved as a Forbes Business Council member and content contributor.

You may also recognize some of Brian’s anchor clients like Coca-Cola, Comcast, Coldwell Banker, Entrepreneur’s Organization, Hospital Corp of America, and Karbach Brewing, to name a few.