“I don’t need an exit strategy.”
I remember thinking this when I got started building New Work City. I was so passionate, so committed, that I thought the very notion of walking away from this thing I was building was a betrayal.
There were a lot of things I didn’t know about business when I got started. I certainly didn’t understand the importance of separating the identity of the business from the identity of the self.
If you’re in a similar position, I’ll tell you what I wish I’d heard someone explain better to me: start with the end in mind.
You don’t have to have a crystal clear plan. You don’t have to stick to that plan; you can change it up many times. But be heading somewhere.
Your business can live forever, but you can’t.
Your plan can to run your business for the rest of your life, but even then you’ll need a succession plan. Business entities can be immortal, so long as its creators architect it to be something that can be passed on.
Your exit from your company may be when you exit this lifetime. Regardless, it’s going to happen.
In all likelihood, it’s going to happen much sooner than that.
So what are your options?
Generally speaking, it comes down to one or several of the following options:
1. Develop a Cultural Institution
You dig in and make a home for yourself that can last forever. You either find a way to buy a building or establish a long-term partnership with a person or entity that owns one.
You embed your business in the neighborhood. You become a hub of activity for not just work but community events. Art shows. Retail. Education.
There’s a board of people who are invested in the project, so it’s not just you. Maybe it’s a co-op.
It can be tricky to get it rolling, but if you can pull it off, you can maintain a clear focus on your mission and serve your community for a long time.
The choice option of the Hospitality Coworking sect, expansion plays the real estate game. Find a space at a price, figure you can make a margin on it, and expand into it. The aim here is to make a process that can be reproduced reliably and systematically.
Without another element at play, I don’t see this as being sustainable on its own, because it’s still exposed to the changing winds of the real estate market… but by expanding, you create economies of scale that expose you to some opportunities that could help counter the real estate risks.
This is similar to the expansion model, but more lightweight. Instead of building and managing spaces yourself, you license your brand, processes, and resources to others who can take your materials and run with them.
To pull this off, you need to feel pretty great about the operation you’re running. It has to stand out enough to be of interest to others.
You’ll document everything, making your formula as portable as possible. You might put some extra effort into helping ensure your first few franchisees are on the right track.
You’re about more than just renting workspace, right? Go back to the purpose behind why you’re doing what you do. How else can you be serving that mission?
Popular routes include education and events, where a space can be used for other valuable purposes, but diversification could mean offering consulting services, retail, a cafe, a bookstore. It could mean partnering with the local government on a job creation program.
Assuming there’s a buyer to be found, you can sell to someone else who’s in a better position to carry the torch. Maybe they’re a direct competitor, or maybe they run similar spaces in other cities.
It’s bittersweet. It’s sad. It is, however, an option. If none of the other options proves preferable, you can close. Should you decide to go this route, I recommend you own it. Throw a party! Write a retrospective. Give people a chance to say farewell.
You can even plan to do this in advance. Doing so creates powerful opportunities, because it gives your community a chance to decide where it wants to go next.
Regardless of which path you aim for, aim for one of them. I ended up closing my space after pursuing several of the above options, but if I’d aligned the business with a long-term plan earlier, I might have found a better route.
Your business doesn’t need to last forever to be a success, but it would sure be cool if it could!
Need help getting started with your business planning? Check out my free coworking business model template, my premium coworking business model package, all of which is included in Organizers Club membership (which is the best deal).