Set a $10 million exit target from day one to align every decision toward building real enterprise value. Private equity firms pay roughly $10 million for businesses generating $1.5 to $3 million in annual profit. This five-year goal forces discipline that the short-term sales grind never creates.
I think every entrepreneur should set the target of having a $10 million exit, even if they're first starting out. I think they should get into the game saying, I'm going to sell a business for $10 million. And that is because they start to allocate their decisions for that outcome. Whereas most entrepreneurs get into the game and they think, okay, how am I going to sell this one thing? And they don't think about the long term decisions. I want to have a $10 million exit five years from now. Totally doable if you align your decisions behind that result. But the entrepreneur who's thinking about, gee, I just hope I sell this inventory over the days, they're going to do the short term things that might get there, but they're going to train themselves. That's what works. And that becomes a hamster wheel that they just stay stuck on versus the entrepreneur who's thinking way beyond that short term goal. That's the person who is open to doing the things that actually bring that amount of enterprise value. So I think every entrepreneur should start off with at least a $10 million exit because that's going to frame their decisions for how they approach the business from the very get go. And the only reason why people don't do that is because they think that $10 million is a lot of money. When you realize that there's private equity groups and big brands who are very willing to cut a check for $10 million for a business that makes 1.5 to $3 million in profit, you just realize that there's a lot of money out there. You just gotta build the asset that is worth that. And if you align your decisions behind that outcome, you can absolutely build an asset that is worth that amount of money.
