This video has been pushing itself into my virtual visual field lately.

To summarize for you, this is the story of a multi-level marketing business that, to the dismay and financial harm of it’s associates, turned out to be a pyramid scheme.  The difference between a network marketing business model and a pyramid scheme is: a pyramid scheme makes money from recruiting people (and their money) rather than making a profit from selling a product.

My purpose in this post is not to warn you against unscrupulous marketers, I trust you to do your research and be skeptical.

My purpose here is to help you prepare for the possibility your business might fail.  It happens. It happens a lot.

If It Happens, Be Ready

When the LuLuRoe business system began to fail, the product quality deteriorated, the support system evaporated, the associates, once thriving and flush, found their customer base unhappy and complaining and, consequently, their basements became full of products they couldn’t sell.  Eventually they had no choice but to quit.

One particularly compelling story is that of an early adopter. A woman once making many thousands of dollars each month and living large (she bought a $4000 handbag!) who, without her business, was forced to sell her house.

This is a sad but not uncommon story. No matter your business, your level of success, or your positive expectations for the future, you should have an exit plan for your business.

If these disenfranchised associates had given thought to an exit strategy early in their relationship with this company, they might well be in a stronger position today; better able to start all over again.

For you, it is not too late.  Take time now to develop an exit strategy.

Begin Here

As always, begin with a vision. Take time (use the tools on my website) to get very clear about what you want from the sale or closing of your business. Possibilities include more leisure time, a monetary payout, to leave a legacy.

If you know what you are hoping to gain, big picture, from your business building efforts, you will have a point of view that will help you see the writing on the wall while there is still time to react.

If, when you analyze your business from a business leadership perspective (Chapter 8), do you see any of these problems:

• Cash is not flowing; bills are going unpaid
• You customers are unhappy
• You are constantly putting out fires
• You are not getting the information you need
• You have too much inventory
• You feel alone and isolated

If you listen to the entrepreneurs in this video, you will see they experienced all these things, yet without a plan, or indeed even the expectation of ever letting the business go, they had no way to minimize the damage.  In the end, their thriving businesses dried up and left them holding worthless inventory.

Business failure is often a step on the road to success.  Closing a business that is not meeting your expectations can be a wise move.  Sometimes you may choose to close your successful business to take on another, more enticing project.  In my next post you will find some ideas to help you develop a clear exit strategy.