Venturing into something should be weighed carefully with keeping all the aspects in mind. This includes failure as well.
It would not be prudent to jump in thinking only about success.
A person must think about ‘what if it does not succeed?’
Should i have quit strategy?
Arthur, I'm not sure why any business school would teach a "terminating a business" class. Teaching it as part of an entrepreneurship class suffices and is already part of numerous entrepreneurial classes. This is inherent in the overall planning of a business when one looks at burn rate, life cycles, strategy etc. The discussion falls under managing the entrepreneurial business, starting the entrepreneurial business, and entrepreneurial law.
Contracting of partners covers what happens in failure to partners and when partners leave and is woven in with the overall study of entrepreneurial law. I would argue partners who don't know where they stand for success and failure skipped the very important legal process of formation. That has zero to do with Tom's advice. A simple, "partner's should be astute with their contracts in planning for success and failure" would be a constructive added point of discussion.
Beyond that, exiting a business in terms of acquisition is also taught and the flip side of that is a lack of success. For programs that do not implement it, sure it could be covered in a class or two. In no way does it need to be a core class as success and failure is part of every business class I know of.
I am confused though. In one of your other posts you boasted you tell entrepreneurship students they should drop out if they really want to be entrepreneurs. So they would not be in class to take your class even if a college listened to you and created it! And you seriously wonder why colleges aren't listening to you when you encourage their main source of revenue leave?! It is quite humorous really. "Student's if you really want to be entrepreneurs please leave now. But if you stay please take my course on "how to fail with dignity." I think there is a logic course needed in there somewhere.
Kishor, Tom's advice is great! Everything about his post illustrates the needed passion, determination, and will to succeed mentality. Entrepreneurship embraces many aspects of psychology, and that is something rigid businessmen often fail to be competent in. You do need both sure. Yes one needs a team. Yes one needs a well thought out plan. But without drive, passion, and determination to fuel that, one has writing on paper as Chuck alluded to. And usually, the characteristics Tom mentions are what leads an Entrepreneur to build what he needs. Passion without competence and a plan wont guarantee success, but passion with competence and a plan certainly will put you above many.
The only thing I would add,is if you have a passion for your business that is a great start.But if you have that, let your mind kick in...put together a solid and detailed business plan. As you build for success, know that the flip side is failure. Keep your strategy focused on succeeding, not quitting. Have smart contracts that cover you and your partners should your company fail, but obviously also succeed. If you incorporate your company with detail, and you put together a competent business plan with equal detail in all the sections from marketing to operations..financial etc, you will know what you must achieve to succeed and you will have an honest understanding of what failure looks like. But put the word "strategy" on writing and in mind only with success.
This has gotten a little off track due to one of the posters inability to comprehend other's posts and the spirit and intention with which they were made. Also of note here, an exit strategy has been used only in the light of a company failing and shutting down, and not in terms of a successful completion of business or an investment, which I'm assuming the poster understands.
Now, as Tom pointed out, no one has suggested not knowing where a life preserver is. That is absurd. But to Tom's point, a venture is a journey that is often dynamic and ever changing. The destination is not always known. To stay on this trite life saving device analogy, in the beginning, a business plan is created. It is a living breathing document that changes. One understands, again as Tom pointed out, that there may be a time to close the business. The entrepreneur evaluates what is needed to be successful and profitable and moves forward along the way understanding if that does not happen, one must close.
But what happens when you plan to take a life preserver because in the beginning you think you're going to be traveling by sea....Only 6 months or 1 year in, you find yourself on a plane and need a parachute? All the time spent strategizing how not to die in the sea wasted so that you can now figure out how to safely jump out of a plane with a life preserver! At each stage of the process, you plan and cover yourself for success and failure and adjust as you go along. That is understood and a given.
You evaluate your financial needs and what you can and can not risk. At what point do the lights go off? But when I hear strategy it connotes a master plan, detailed. There are so many things that can go right and so many that can go wrong. One of your partners breaking contract, embezzling investment funds and heading out of country is one of many possibilities that can lead to a startup shutting down. To strategize for that though on day one beyond what one can do legally through contracts is a waste of time, energy, and much needed positive thought.
There is a huge difference to preparedness, and creating a strategy to quit at the beginning. I consider having a plan, proper contracts in place, and contingencies a strategy for success. The flip side of that is one is prepared to fail if they are properly prepared to succeed.
Susan to your point, could you have foreseen the type of exit you would have made at the beginning for year 8? My guess is understandably not. If you did, please provide all of us with lottery numbers!:)
To Tom's point, and the vein in which I accepted and applauded, without a crystal ball a "quit strategy" on day one may or may not be the appropriate way to exit a failed business on month 6, or month 8. And planning to quit can have severe psychological implications.
An entrepreneur who builds a solid base, structurally, organizational, and legally, along the way will be more than capable of properly closing out a business should it need to at any point in time. Beyond that, stay positive and work on the strategy to succeed.