Your Jewelry Business Exit Strategy

© by Sally Jones; all rights reserved

A business exit strategy?? I'm just starting my business - why do I need to think about how to end it?

I know it seems strange to think about how you'll end your business. When you're starting a business you have lots to think about and even more decisions to make, but it's just as important to consider how you will dissolve your business someday - which is known as your "exit strategy".

This is especially true if you are going into a partnership. No matter whether you're going into business with a sibling, your best friend, or someone who has the cash to help start your business - you need to have, in writing, how you are going to quit the business someday.

Why is a written business exit strategy so important? Because if it is in writing, there are no hurt feelings when it comes time to disolve the business. I have seen many friends become enemies over a business. Just as you would have a contract on each person's job description, you need to know who gets what when you dissolve your company. Also, no one will be filing lawsuits over the dissolution of the company if everything has been laid out ahead of time.

Let me give you an example. Three friends went into business together. Each had an equal partnership. Because they knew it would be several years before the business would make money, they had a business exit strategy in writing.

Each person's investment was tied up in equipment, and each signed the lease on the building. If one of them wanted out, she would simply not sign the lease and would only get the equipment she brought into the business.

One friend decided that she did not want to be in the business any longer. Try as they might, the other two could not talk her into signing the lease for another year and then maybe trying to sell the business. She said no, and she left.

About two months later, an investor walked into the shop and offered to buy the business. The two remaining friends sold it. When the third friend found out, she wanted one-third of the profit. But the other two did not split the profit with her, as she had already left and had not signed the lease. Needless to say, the friendship dissolved as well as the business.

Whether you're starting your enterprise alone or with partners, your business exit strategy is important to think about - even if you haven't opened the doors of your new business yet!

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