Exit Strategy

There's a rather horrible saying that your first marriage and your first business should be all about the money with a clear exit strategy. If you're contemplating a game store, most likely you've never heard this before. Most small businesses (and first marriages) start from a place of passion, with a commitment for the long haul. Commitment is good, but an exit strategy allows you to keep things in perspective.

Part of your business plan should be thoughts on how you will gracefully depart from your beloved business. It should include clear rules on how to buy out partners, how you will valuate that buyout and the time frame in which that will occur. For yourself, you should consider what failure looks like, as well as success. Failure is going to be about the money and you need to draw the line or risk losing everything personally. Will you risk your home? Is there a clear line in the sand you wish to draw in regards to debt? Drawing the line in advance prevents the slow creep of debt.

Departing while successful seems kind of a dumb idea. You've worked so hard, taken so much abuse from the naysayers, why would you "give up" now. But it's important to consider this. Not only should you know what failure looks like, but you should define a "win" condition. A "win" condition may mean your business is in a place it could be sold profitably, or you could decide your initial objectives are met and you have new objectives.

Objectives should be rather subjective, I think, as in building a strong gaming community in city of Gamerville, or revitalizing role-playing in the region. Objective goals are rather empty, I'm finding, as in, build a store that does $1,000,000 a year. So what? That's just a number on a piece of paper and doesn't take into account your passion or that of your employees. Building a salary you can live on is a great objective, but that's more a staying strategy, not that there's anything wrong with staying. Defining success can be as difficult as determining when to quit.

An exit strategy has a couple fine points to it, one of which is it allows you to do other great things with your life. It might mean you've won the store battle, and perhaps you want to open a second store. Perhaps you want to move into another area of the game trade like distribution or game design. After nearly a decade doing this, I can see why the trade tires you out with all the small time shenanigans. An exit strategy could leverage your skills to run any number of other small businesses. I constantly (half) joke that my next business will be a Subway franchise.

An exit strategy can also be of benefit if you find yourself sick or injured. If you've ever been to a trade show and seen the average game store owner, let me tell you that carrying an extra 20 pounds, I'm in the featherweight category. If you're going to throw caution to the wind and game like you just don't care on Cheetos and Mountain Dew, well, consider an exit strategy even more so.

Here's the real kicker though, an exit strategy will help make your business better. If you want to leave you business or have any hopes of selling it, or expanding to multiple stores it in the future, you need strong managers and even stronger processes. Building strong and consistent people and processes makes businesses great. We're not talking about once size fits all processes or mindless policies, and we're not taking about four hour work weeks, we're talking about empowering your employees to make the important decisions that make your business profitable and your customers happy (that perfect middle ground).

By always assuming that you will not always be there, you avoid adding your own idiosyncratic processes and procedures into the mix, or worse having no processes and procedures. Even if you're a single store operator, work on building consistent policies and procedures. Even better, write them down. Have a manual where this stuff is written and change it over time. Make it a living document not a dusty book on the shelf. You need to write this yourself and you can't borrow someone elses. Living means it not only changes, but it's unique and it's yours. It may be such a part of your retailer DNA that you never look at this stuff, but you'll find current and future employees will, and they'll likely be more invested in it than you ever thought. Everyone wants to know what's expected of them and I know my single biggest frustration in working for others was not knowing what they wanted, and usually because they didn't know themselves.

So an exit strategy means a bit of your ego is removed from the picture. You're building an institution that can live beyond you, whether it means you're in the ground or next door running your new sandwich shop. You've created something of value, rather than a twisted mess of "what you did" to get by. Nobody wants your crappy game store if only you can run it, but a clearly run business with documented policies and procedures, possibly with an experienced manager in place, has actual value.

Best of all, you've not only increased your ability to sell your business to the next guy or gal, but while you're still enjoying it, you can now take a vacation, have sick days, go to trade shows and plan a retirement with income, not just a one time, fire sale payout. An exit strategy pays off now in both a better run store and an improved quality of life.