Business strategy for retreat exit and knowing when to pull the plug
This retreat exit strategy may be required at any time and not obviously part of your initial plan for success.
An exit business strategy for an unsuccessful business requires particular attention given the negative circumstances or potential loss making scenarios this may present.
The initial exit strategy designed around your business objectives being achieved had the advantage of control and at least a rough estimate of some determined point in the future when the exit would be executed.
You at least could decide when or when not to execute that exit.
A retreat exit strategy often presents an actual or perceived lack of control and therefore presents a range of unforeseen variables and uncompromising pressures.
Below is an introduction to how you might manage this exit and how a Flop Plan should enable you to better manage risk.
At the setup stage, you should have developed an Exit Plan for when the business is a success and you want to sell up.
If you are already running a business and you don’t have an Exit Plan then construct one.
An Exit Plan might simply consist of you passing the business to your son or daughter or it might mean closing the business down when you retire. For many, the exit means the business will be sold or even go public.
A Flop Plan or retreat exit is a strategy and plan of action to close the business due to negative circumstances. The Flop Plan should minimise the financial and commercial damage to you, your suppliers, customers and backers.
The Flop Plan should therefore assist in your navigation out of the circumstances you find yourself. The reasons may be emotional, personal, health, lack of application or more commonly due to lack of sales, lack of profit or cashflow.
Before you decide or do anything, always first seek professional advice. Take your time and get this right. Seeing professionals should enable you to write a list of options – and consequences.
Sources of advice
- Accountant
- Lawyer
- Citizens Advice
From this you will have two strategies with each containing lists of tasks.
- Exiting the business.
- Managing the consequences. Always handle your affairs properly and with professionalism. At the very least, you can say you worked the situation honourably.
If you have to execute the Flop Plan then see this as not failure but well-earned experience. Virtually every multi-millionaire out there that has had to work with reality has had to execute a Flop Plan at some point in their business careers.
If you have the energy and the inclination, then keep a journal of what happened and why. The financial and emotional costs, along with the time invested is more cost-effective when written down. You can then refer to this on your next project. It is an asset you own.