# How to leave an entrepreneurial role After you've started seeing a profit, you should start considering how you plan to leave the organization. - Beyond [the business plan](entrepreneur-3_plan.md), have a long-term goal if you want *anything* beyond simply yourself (or possibly your [family](people-family.md)). - When you start getting bored with the business, you should sell it. If you have a good-enough business idea and promising-looking [financial statements](money-accounting.md), you can still sell the company even when you haven't turned a profit yet! - You're almost guaranteed to have a marketable business, even if it loses money, if you own [high-demand](economics.md) [intellectual property](legal-ip.md) tied to the company. Logically, there are only several possible ways you can go: 1. Sell the business outright and leave with a significant amount of wealth. 2. Develop better [management skills](mgmt-1_why.md) and scale it to a very large organization. 3. Give the business to your [children](people-family.md) when they're old enough to run it. ## Failing Learn when to stop. - Most business ideas do *not* take off, and that's okay. - Avoid going deeper into debt and wasting more of your life than you need to. - Create a fixed, measurable limit on how much you'll go until you stop (e.g., no more than $10,000 of savings into the business). ## Selling Selling is generally a better idea than scaling, mostly because large-scale organization management is an [*entirely* different skillset](mgmt-7_changes.md). - Further, you have the opportunity to [diversify](money-investing.md) the wealth you've acquired through building your business to that point. If you wish to sell the business, you have several options: - Propose a merger with another similarly-sized company. - Sell the company to a larger company as an acquisition. - Take the company public and sell it on a stock exchange. - Sell the company internally as an [Employee Stock Ownership Plan (ESOP)](money-accounting.md). Try to sell before you have to. - Buyers want to feel "blue sky potential" and get excited about the growth they expect to see. - If it's already at its peak, it won't inspire as much excitement. Unless you're in an industry that doesn't care about [brand](marketing.md), the value of the company is *not* simply its [asset value minus its liabilities](money-accounting.md). - You have built a reputation, and the premium over the equity value of the company is the direct market price of your company's name's [reputation](image.md). - Most buyers are asking what financial gain your reputation will have on the future, then discount it over that window of time. - e.g., if they expect to gain $10 million from your company's brand within 3 years, they may propose buying it for $3 million but be willing to [haggle](people-5_conflicts.md) up to $5 million for it. ### Mergers & acquisitions Bear in mind what mergers and acquisitions will do to your organization: - When you're in a merger, you're officially partners with whoever runs the other organization. - When in an acquisition, staying on with the organization makes that company's leadership [*your* boss](jobs-1_why.md). If you plan to interest a company in an acquisition, contact the CEOs who were interviewed in a major publication (e.g., Forbes). - Generally, CEOs who have had their ego stroked publicly will pay a premium of 4.8% more for every major article they've had. Most mergers and acquisitions (83%) do *not* boost the value of the company. - Only do it if you want to be completely rid of the company. - Be careful, though, since you might be selling it to a *very* [unhinged](mind-neurodivergence.md) person. ## After selling Do *not* retire. - If you have [a personality that can start a business](entrepreneur-1_why.md), you do *not* have the personality that would find comfort in endless recreation. - After succeeding, most entrepreneurs [start *another* business](entrepreneur-2_idea.md), create a [not-for-profit](entrepreneur-3_plan.md), or [mentor *other* entrepreneurs](education.md).