5 Exits Every Founder Needs to Make

Quick heads-up…

Today's newsletter is all about the ”5 exits” every founder needs to make if you want to optimize your wealth, freedom, and optionality.

If you want to go deeper, my partner (Roland Frasier) and I are hosting a live workshop this Thursday where we’ll help you score your business across 11 "Value Killers" and find exactly what's blocking your next exit.

Get the details and reserve your seat here.

-Ryan

My friend Sarah called herself a CEO…

…on her LinkedIn, her business card, and in every meeting.

But on any given day, she was jumping between a half-dozen different roles...answering support tickets, approving invoices, sitting in on sales calls, putting out fires her team should have been handling.

5 years of this.

She wasn't a CEO.

She was a “CEOBTA”…a CEO By Title Alone.

And she had zero plans to change it. Why? Because she wasn't planning to sell.

There's a whole genre of business books that tell you to "build your business with the intent to sell." The advice is solid...but most founders dismiss it because they're not planning to sell.

"I'm not selling anytime soon, so why does it matter?"

That one sentence gives inefficiencies get permission to linger and fester, and it’s why good companies stall out.

Here's a better way..

Instead of "building to sell," always have your next “ideal exit” in mind. Not the final one. The next one.

That's what The 5 Exits of the Entrepreneur is all about…

You stop doing the day-to-day work and hand it to someone else.

You’re probably thinking, “Wait, that’s not an exit… that’s just hiring.”

But here's what most founders miss...

Your first hire was an exit…you just didn't call it that. Every time you hand off a role you hate or aren't good at, you're completing a version of Exit 1.

This is the big one...and the one almost all founders gets wrong.

Exit 2 isn't just "stop managing people." It's ascending into the true CEO role for the first time.

But here's why most founders never get there: their business still runs on a “YouOS” where they are the operating system.

Without a separate, documented company OS, you will always get pulled back into the weeds because YOU are what the business is running on.

Every time a role gets vacated, every time someone quits...you're right back in it. Managing the people. Playing six roles again.

That's what happened to Sarah. For 5 years she stayed stuck between Exit 1 and Exit 2. But once she identified that her next ideal exit was Exit 2 (and that the unlock was an operating system, not just better hires)...everything changed.

Six months later, she was running her company like a CEO.

The business was more profitable, and she was finally able to take a real vacation. This is what happens when you achieve “Exit 2.”

This is when you bring in an operator...a president, General Manager, COO, or even CEO...to run the business for you.

But you can't skip to this exit.

If you haven't completed Exit 2, bringing in an outside operator will fail because they need an operating system to plug into. Without it, they wind up becoming your glorified executive assistant. (Ask me how I know.)

For this exit, you step back from strategic oversight entirely.

At this point, you're essentially a shareholder in your own company...like owning stock in a business someone else runs.

Personally, I don’t like to linger in this exit for very long, because if I’m not adding value I’m probably just going to sell the thing. But if the business is kicking off a lot of cash or if you want to preserve it for the next generation, this is your ideal exit.

The full sale. The one everybody already thinks of when they hear "exit."

Here's what's worth knowing...if you try to sell without completing Exits 2 and 3, you're going to get lowballed. If the business can't run without you, buyers price that in. Heavily.

The sequence matters. You can't skip steps.

And here's the real insight...

"Exit" isn't one big event at the end. It's a series of smaller, progressive “exits” along the way. Every founder has revenue targets and profitability targets...but almost nobody has an exit target.

If you aren't actively exiting from the role you're in right now, that's when you stagnate, that's when you burn out, and that's when your company stalls.

So what about you?

What’s your next ideal exit?

⚡️ Action Step: Identify your next ideal exit. Look at the five exits and figure out which one you've completed and which one is next. Write it down. That's your target for the next 6-12 months.

Give it a shot and let me know how it works…

-Ryan

Ryan Deiss
Co-Founder and CEO, The Scalable Company

P.S. I can't take credit for the 5 Entrepreneurial Exits framework...this one comes from my friend and business partner, Roland Frasier.

The good news? Roland and I are hosting a live workshop this Thursday where he'll help you score your business across all five exits and identify exactly what's blocking your next one.

Get the details and reserve your seat here.