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Begin With the End in Mind

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How do you plan for the end?

Having the end in mind at the beginning seems counter-intuitive to most. There is no certainty that your position or the organization you create or are a part of will exit one, five or ten years from now. Things change -- needs evolve -- life happens.

So what do you do?

A poorly constructed business plan, lack of clarity or not having a proven business model before the resources run out can be contributors to the cause of death for any organization. Social enterprises are no exception. However, closing up shop doesn't have to be the only way out.

Consider the triggers for exit in your sector -- what scenarios can occur that can force your enterprise to stop what it's doing and how it's accomplishing its mission. How will you, as a leader, address potential scenarios that can occur and what are the resources that may be required for a successful exit.

For-profit organizations can rely on exit strategies that include a sale, merger or an Initial Public Offering (IPO). Social enterprises that fall into this category need to consider the risk of dilution to one of their two (or three) bottom lines -- making a social impact -- when participating in these types of exits.

For not-for-profits, it's a bit of a different story as they cannot engage in a sale or an IPO. Funders tend to have short term and time based exit strategies tied to funding cycles. Grants are typically for a specific period of time driven by pre-determined guidelines established by the funders themselves. There is an exit, but where does that leave the organization itself?

Social enterprises that fall into the not-for-profit category can utilize a change in leadership as an alternative exit strategy. However, this can come with its challenges as the founder or leader's identity, story and relationships can be tied to the organization's success. The departure or replacement may not be ideal for its growth and continuation.

There is no 'right' exit strategy, and we cannot plan for all scenarios that can potentially occur. Strategies vary and are sector-specific. As you put together your business plans, pitches and grant proposals, consider the triggers for an exit, the risks involved and the potential associated costs.

Identifying exit strategies can help manage event-driven changes, unintended consequences and volatility that all organizations face regardless of sector. By planning your exit, this can provide clarity and can instill confidence in your team, potential supporters and investors.

Begin with the end in mind.