Exit Strategy 101

In late 2009, Oprah announced her departure plan from her talk show shows

. Entrepreneurs can learn how to exit gracefully and profitably.

It was shocking news when Oprah Winfrey announced in 2009 that she will depart her popular national syndicated talk show next year. Oprah discussed her difficult decision on the air and "knows in her bones" that 25 years as a talk show host is the right number for her.

For years, I've been working with many business owners to set their exit strategy so they can leave their business gracefully. Typically, however, people don't want to give away their baby. So how and why can Oprah do it? Here are five reasons for Winfrey to "sell."

1. Investment 101--Buy low and sell high with the right market timing. As entrepreneurs start their businesses, they invest

lots of money, sweat, pressure, time, etc. According to the SBA, one-third of businesses close without cashing out. That being said, many business invest high and sell low. Winfrey is doing the opposite: She's timing her exit. Just like any investment, you need to know when to sell or at what rate of return to sell. For Winfrey, it's the magic number 25.

2. Build your empire with diversified revenue streams. In addition to Winfrey's nationally syndicated talk show, she has a series of satellite radio talk shows. She has O, The Oprah Magazine. She has Dr. Phil, Dr. Oz, etc., who continue to generate revenue. She knows how to diversify her revenue streams. She can pick and choose which one to exit when it reaches the desirable ROI.

3. Leave the competition behind. There are a lot more nationally syndicated talk shows today than there were 24 years ago, when Winfrey started. Because she's so well-positioned with other revenue streams, it's easy for her to exit rather than continue fighting her competition.

4. Leave gracefully with a desirable return on your investment. ROI is different for every business created. Most entrepreneurs don't know what that is. In Rob Slee's Private Capital Markets, he shows 30 years of a privately held business transaction cycle. Every 10 years, it has its own cycle and it repeats itself. If we already know when it's the prime time to sell or exit your business, why not plan for it?

5. Know what to do next. Winfrey has established the nonprofit Oprah's Angel Network and developed a private girls' school in South Africa. She knows what she will do next. She didn't let the talk show take over her life. She creates life outside of the talk show and is already making plans for her next endeavor before she leaves the show.

Don't let stress, health, competition, economic troubles or your family situation be your exit strategy. Be proactive and talk to your trusted advisors to lead you to a graceful exit like Winfrey.

by: Chia-Li Chien

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