Have you ever been so caught up in extinguishing day-to-day fires in your business that the thought of planning your exit seems like a distant dream? It’s a common trap for entrepreneurs, but today’s discussion is all about breaking free from that survival mindset to achieve a “dream exit” that aligns with both your financial goals and personal fulfillment. In this solo episode, Mike dives into the critical components of exiting your business with success, shedding light on the perils of 3F thinking—fires, fears, and folly—that can sabotage your future. With 81% of entrepreneurs regretting their lack of exit preparation, Mike presents reflective questions designed to steer you toward a strategic exit plan, enhancing your business’s value and ensuring a smooth transition.
Check out the video version of this episode below:
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Episode transcript below:
00:00 – Mike Malatesta:
On today’s episode, we are talking about how to avoid the survival mindset when it comes to planning for the exit of your business, and we’re going to acknowledge and talk about how to move forward, move away from or move through this concept that I call 3F thinking that so frequently gets in the way of exit planning. You deserve to be doing. I hope you get value from this episode. Thanks for joining me. Hey everybody, welcome back to this 3Thinking Friday episode of the how to have a Podcast. I’m Mike and thank you so much for joining me today. Today, I’m going to continue on my series about this topic that’s fascinating me, which is the planning for successful exits or transitions in business. This is something I call a dream exit. Came up with this term back in 2023, and I’ve been extremely focused on helping people achieve what I call their dream exit ever since. So today I’m going to talk to you about avoiding the survival mindset and, again, this is primarily for entrepreneurs and business owners successful ones who know that they should be planning for this dream exit that I believe they deserve, but unfortunately, too often do not, and I am out to change that. So let’s start with this 81% of business owners who recently sold their business wish they had spent more time preparing their business and themselves for a sale. Now, if you’re a business owner and entrepreneur, that’s got to get your attention Now. I came across that stat in a UBS sponsored survey of 123 recently transitioned or exited business owners that was conducted earlier in 2023. And, honestly, I’m not surprised. In fact, I think the percentage could even be higher. So why is this the case? Why do so many business owners look back at their selling experience with at least some degree of doubt, uncertainty, regret or worse? Why, when preparing for the most important financial and personal experience of their lives, do they often not invest enough time in the process, or any time in the process, until it’s too late? And I feel like the answer may lie in what I call 3F thinking. And 3F thinking is fires, fears and folly. So fires is like oh, I have all these fires to put out today and I don’t have any time to prepare for tomorrow. That’s the fire thing. Fears I don’t like asking for help and I don’t know where to find it, so I’m not going to do it. That’s fears and folly, and this is something I’ve had a lot of in my life. I’m at my best when I wing it and fly by the seat of my pants. That’s folly. So 3F thinking is really a survival mindset that most entrepreneurs and business owners are born with. It’s what makes them so successful, but it can also be their downfall when it comes to preparing for their dream exit. It’s what makes them an entrepreneurial superhero, but all superheroes have their kryptonite too, and when it comes to preparing for the dream exit that all successful entrepreneurs and business owners deserve, 3f thinking might just be that kryptonite.
03:59
So what is the dream exit? Well, the dream exit happens when two things are achieved One, a business is sold for its maximum value and two, the business owner or the entrepreneur is ready to maximize their meaning and purpose in that post-exit or post-transition life. So how, then, can we square up the dichotomy of 3F thinking with the goal of a dream exit? Well, the first step, as I learned from a mentor, is that all progress starts with the truth. That’s something I first heard from Dan Sullivan. I don’t know if Dan Sullivan came up with that, but that’s where I first heard it. All progress starts with the truth, and the truth is that 3F thinking is real and must be transformed if you’re going to make progress on planning for your dream exit.
04:56
The second step is more challenging because it’s like dealing with the actual kryptonite. Maybe you grew up watching Superman in the movies or on TV, like I did, and if so, you’ll recall that he is literally helpless against kryptonite, this fictional mineral that comes from his home planet of krypton. Superman had no natural antidote for kryptonite and you might not either for your 3F thinking, so he needed help from equipment like lead shields and super suits, and he relied on help from allies to remove the kryptonite or keep him away from it. And, just like Superman, you’ll likely need support from equipment and allies to overcome your 3F thinking. For example, a teacher in a playbook that will help you acknowledge and move past any 3F thinking that’s preventing you from focusing on and preparing for the dream exit you deserve. It may feel like an enormous challenge to put a dream exit playbook together, but like eating an elephant or walking a thousand miles, fortunately the answer. Proverbs give us great advice when it comes to conquering big challenges Start small. You know the saying you eat an elephant, one bite at a time, and you begin a journey of a thousand miles. With what A single step. So let’s start by reflecting on these four questions to initiate the assembly of your dream exit playbook.
06:29
Number one what is a business exit strategy? Well, it’s a plan that outlines how a business owner will sell or otherwise transition out of their business. This sounds simple. It is not. Number two what are the different types of exit strategies? Well, these include selling the business to a third party, passing it on to family members, selling to employees or co-owners, or liquidating. There’s others, but each have their own pros and cons. You have to know what they are. If you know what all the options are, you have to know what the pros and cons are so that you can get your head around what makes sense to you. Number three how can an exit strategy benefit my business now? Well, this one’s easy. A well-planned exit strategy can help you make business decisions and increase the current value of your business. Like who doesn’t want that? That’s what business is all about.
07:27
And number four why is planning an exit strategy important? Well, an exit strategy is not just about selling the business. It’s about defining the business owner’s goals, ensuring the business’s longevity and maximizing the value of the business. So it’s crucial. It’s crucially important and again, 3f thinking that’s real stuff, but it shouldn’t keep you from preparing for the dream exit you deserve. Remember, a staggering 81% of business owners wish they had prepared more for their exit.
08:06
Now, I don’t know about you, but that doesn’t sound like a dream to me. So what I suggest is that you take that small bite and that first step today, and you know what? That kryptonite will be neutralized and you’ll be on your way to creating value, to creating meaning and, ultimately, to creating the dream exit you deserve. I hope you got some value from this today. Thank you so much for listening.
08:35
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09:31
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