Designing a new business with an exit plan

Whether you are starting a new business or planning on retiring from your business, you need a plan. Last year I spoke with two different financial planning firms about this issue. Then today as I was sorting through my email inbox, I found this from Chuck McKay:

First you must do everything, then as little as possible.

Please enjoy...

A long-term client called last week to brainstorm his next business venture.

We talked about how to structure the business, and I suggested that he outsource as many of the operational functions as possible.

He fought the idea. Said it didn't give him enough control.

So I asked, "Are you trying to build a company, or to change jobs? Because it appears that you're designing a company which will require your presence."

Isn't that the worst thing about self-employment? When you go on vacation, the office shuts down.

That's not owning the business. That's being the business.


Here's a simple way to plan your organization.

Draw the plan to show now how things will run when the company is fully developed. Show the President, both VP's, the Marketing Director, the Personnel Director, Sales Manager, and line level employees. Put your own name in every blank (assuming that you're the only employee).

Now, starting at the bottom of the chart, at the customer contact level, write an operations manual for one of those jobs. Detail exactly how you want the job (and the customer) handled. Hire someone to fill that job, and put her name in the box. Follow this procedure with every job in the chart, removing your own name as you hire and train your replacement for that particular responsibility. When the only place your name remains is at the top, you've built a company which can survive your vacation.

Now you can start implementing your exit plan.

You do have an exit plan, don't you?

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