The chorus of The Gambler by Kenny Rogers ran through my head many times during my career as an entrepreneur and business owner: “You gotta know when to hold ’em. Know when to fold ’em. Know when to walk away. Know when to run …” The funny thing was, I never really got past those first lines until it was almost too late. This, in many ways, is the culture of entrepreneurship. The shrewdness of the holdout, keeping your cards close to your chest and making epic gambles that will surely pay off. In fact, most of that song is about knowing when to throw in the towel, cut your losses and walk away.
The Impending Exodus
There can be so much power in knowing when you’re done. According to a 2023 Financial Post article, 67 per cent of small- to medium-size business owners plan to exit in the next decade. In addition to retirement, many cite stress and burnout, the urge to step away from day-to-day responsibilities and mounting financial pressures resulting from the pandemic, supply-chain snarls and rising interest rates. The volatility that has reared its ugly head over the past five years has increased the pressures faced by entrepreneurs in managing growth, attracting talent, raising capital and bearing the rising cost of doing business.
It’s not just about exiting a business. The heady decision to let go of a career, an employee or a critical aspect of a business can offer so much freedom. Entrepreneurs often get stuck in the “push through the pain” attitude that locks them into ego-driven decisions or worse, indecision.
When I decided to exit my business, it was almost too late. There isn’t a day that goes by that I didn’t wish I had sold a year earlier. I recognized all the signs of a business that was reaching a point of fatigue: Everywhere I turned there was a difficult decision to be made based on gas prices, packaging, climate change, even geopolitics. Cash flow was inconsistent, debt was expensive and only afforded short-term relief, and growth wasn’t coming as easily as before. I was bogged down in financials, supply-chain issues, cost efficiencies and logistics.
I remember getting off a call one day about how I had to buy up a huge amount of coconut oil because sunflower oil couldn’t get out of Ukraine and prices were expected to skyrocket (or not — that’s the gamble), and I just thought, “This is untenable.” The business was no longer robust enough to weather a storm. Walking away was a powerful temptation. That once-round peg had become a square and it was time to move on.
When is “Too Late”?
Ceara Crawshaw of Pencil & Paper design echoes this sentiment, saying, “My big cue is when I’ve already applied the lens of ‘how can I adapt to this’ and I keep coming up with more and more complicated answers. I can’t figure out the root cause no matter how much logic I apply. This usually means that the fit just isn’t there.” The landscape is uncharted and businesses are becoming more challenging to navigate. It might not mean that the overall business is threatened, but increasingly business leaders are having to find ways to adapt quickly or let critical aspects of their business go.
“When and how you leave is important,” says Kyle Vucko, co-founder of clothing company Indochino. Optics can be important and controlling your own narrative can be critical for leaders who are looking for a second act. “There are many off-ramps on that highway. But besides selling the business outright, replacing yourself can be a great way to make a clean exit.” In general, entrepreneurs have great love for the companies and brands that they have built and passing the torch can be a graceful and gratifying way to see the flame carry on.
Succession Planning
This is why succession planning, at any stage of your career or business, is key to that legacy. For me, it was important that debt was clear, suppliers and employees were paid and that the brand lived on with someone who could steward it into its next era. Working with a lawyer and a financial team put me in a strong position to ensure that both the brand and my reputation lived on and that I could leave on a high note.
Ann Squires Ferguson, CEO of Western Design+Build, is motivated by the legacy that she will leave behind for her leadership team. “Lifting up other women in construction means ensuring my senior leadership team intentionally develops all the skills they will need to take over Western from me when the time comes, even if that is likely still at least a decade out,” she says. “I’m the second female owner and Western is a tool for women to succeed in the design and building industry; it’s my responsibility to build it for the next generation.”
In the time since I’ve exited my own company, I’ve seen comparable companies hold on for too long, then lose it all. I’ve also witnessed leaders push through the pain by any means necessary, even if it means leaving destruction in their wake. Neither is a good option.
Holding those cards too close or making the big gamble can both be painful. If you built something great before, you can do it again, taking those hard-earned lessons and getting back out there. Often, particularly for first-time founders, “You don’t know what you’re saying yes to,” as Vucko reminded me at the close of our conversation. And that’s OK. That first hand in a long card game with experienced gamblers can be a doozy. That said, planning a graceful exit through thoughtful succession planning can ease the pain of folding your hand and walking away.
Jill Van Gyn-Carr is based in Victoria’s Blenkinsop Valley where she is raising her young family. She is the recently exited founder of Fatso Peanut Butter.
