Don’t be like most content entrepreneurs who spend all their time starting (or growing) the business without ever thinking about their exit strategy.
It could be years away, but knowing your destination informs your business strategy today. With that focus at the forefront, you can make more informed decisions about what you do and why you do it.
Here are five things to consider today – no matter what stage your content business is in:
1. Determine your end goal: When you no longer want to own the business, what do you want to happen to it? Among the common options:
- Pass it down to a family member.
- Merge with another company.
- Sell your business while continuing to work in it.
- Sell the business and leave it.
- Sell a stake to an investor or partner.
2. Grow your audience: All value comes from the audience in one way or another (The New York Times’ value isn’t related to how much content they develop. It is valued on the buying power of their audience.) Grow your audience to increase your business’ value.
An audience-asset business can feel trickier to value, but it really isn’t. It’s still all about revenue and profit. For a content-based business, anything from 1.5x to 2.5x revenue seems standard — or 5x or 10x profit depending on your revenue mix.
If your content business isn’t large enough or profitable enough yet, you could determine the price on a per-subscriber basis or downloads over a certain period.
3. Establish a distinct business identity: Can you separate your personal brand from the content brand? Some creators treat the two with a singular identity – their name. That could be problematic when it comes time to exit because the value of the business is intrinsically tied to the individual.
Think about how to make your brand related but not identical to you. For example, Ann Reardon uses her name on her cookbooks, but she’s evolved her brand identity to include How to Cook That. If you didn’t do this from the start, that’s OK. Plan now on how to evolve your brand identity. After all, that’s why you’re talking about exit strategies now rather than when you want to exit.
4. Write down your plan: Include your dream vision for the business, your exit goal, and your achievement date. Keep it at the forefront visually and mentally, as it should serve as the basis for all the decisions you make about your business.
Your exit plan isn’t set in stone but should remain as solid as possible because it’s the guiding light for the business strategy.
5. Make connections: Share the plan with your team and family, especially if passing down the business is the goal. That way, everybody understands the ultimate goal and can work toward achieving it.
If you plan to sell, identify potential buyer categories and specific companies. Create a spreadsheet with categories such as acquiring brand, rationale, and contacts. Then pay close attention to the news about what’s happening with those companies and the industry. Update the tracker accordingly. You may delete some and add others.
Connect with people at those potential buyers. You won’t talk acquisition now, but you might find a partner for an upcoming project or a sponsor for your latest podcast. You also can learn more about the company, its people, culture, etc.
Yes, it can initially seem odd to plan your exit from the business you plan to start or the one you’re in the middle of growing. But doing so informs your ongoing strategy so you can have the most profitable and satisfying exit when you’re ready.
About the author
Ann regularly combines words and strategy for B2B, B2C, and nonprofits, continuing to live up to her high school nickname, Editor Ann. An IABC Communicator of the Year and founder of G Force Communication, Ann coaches and trains professionals in all things content. Connect with her on LinkedIn and Twitter.