Laura Azzalina Rigali

By Laura Azzalina Rigali

When’s the last time you asked yourself where you want to be as a person and as an executive, and where you want your business to be? Why do you get up in the morning? What’s the point of all the work you do? As a business leader, it’s critical that you know the answers to these questions before answering a single email in the morning. It is so easy for us to be blinded by details, losing sight of the bigger goals and strategies that tell us which details actually matter. As you approach year-end and begin planning for 2018 and beyond, take a minute to reflect and make a plan that pulls you toward your vision.

What I’m talking about here is your exit strategy, which is a fancy way of saying “think backward.”

At what point are you happy with what you’ve achieved and happy to walk away from it? Define your vision, and define your exit. Once you know this, how you spend the days between then and now have a clear direction and purpose. Starting at your end point, you can work backward to identify all the milestones you need to achieve, all the way back to today. Some will be easy, and some may take a few years of laying groundwork.

With a clear end point in mind, you become a value-generating leader pulling your company forward, rather than an incremental “pusher” pushing your company from some arbitrary starting point. You begin evaluating each strategy and activity based on its contribution to your grand vision, rather than simply pushing today’s reality forward another year, maybe with a few tweaks here and there … the dreaded road to nowhere.

Remember, as a business leader, you don’t have a job — you’re building an asset. You’re the custodian of an investment. Every decision you make should add value to your investment and help a future exit.

Exit strategies can take many forms, but here are some common ones to consider:

• Own and manage forever: This would be a lifestyle business, one that is a part of your life and will never go away. This is the anti-exit strategy.

• Own forever, hire managers: This is a way to earn income without showing up to the office every day while maintaining your ownership and control.

• Sell to your family: This removes you from the company and allows the next generation to pick up where you left off. It may represent a total exit from your business, or you may stay close to it and influence your family’s leadership indirectly.

• Grow and sell: Build a company that is a desirable acquisition for a larger business or private equity firm. This represents a total exit from your business, gives you a big payout, and helps you buy an island somewhere.

If this is your plan, it’s never too early to start positioning yourself as a desirable acquisition target. Define your niche and become known for it.

Identify possible acquirers that you’d be a perfect strategic fit for — perhaps a competitor who would rather buy your expertise than build it internally, a company up or down the supply chain that could vertically integrate, or the maker of a complementary product serving a similar customer profile.

Let that possible transaction inform your growth strategy. Aim to be a perfect fit for someone, not a loose fit for everyone. That’s where you get maximum valuation.

Remember that there is absolutely no right or wrong answer here.

Whatever your desired outcome, the importance of self-awareness cannot be overstated. Know who you are as a person, a business leader, and as a business. Know where you want to be, and be humble and realistic about what it takes to bridge the gap and achieve your goals.

Success is not accidental in 99.9 percent of cases. It requires authenticity, a vision, a plan, constant monitoring of performance, honest assessment of what’s contributing to or detracting from success and, of course, guts.

• Laura Azzalina Rigali is a strategy and finance consultant, founder of the Illuminate CEO monthly roundtable and a finance professor in the California Lutheran University School of Management.