Last week’s blog about “Exit Planning” elicited some confusion, and this week’s post will try to clear things up.

To actually exit a family business, especially one that you founded, nurtured, and grew, is not something that is taken lightly. To do so on one’s own terms, and to the satisfaction of all stakeholders, is truly a rare feat. But just because it is difficult, does not mean that we can’t try to pull it off.

One reader questioned the fact that setting an exit date that is too far in the future might actually “de-motivate” the rising generation, if that date was too far in the future. Another asked which date I was referring to when I spoke of the “exit date”, was it management of the business, or ownership?

These are both valid questions, of course, as they invite further discussion. There are no “stupid questions” in my book, the only stupid question is the one that you are afraid to ask, for fear of looking stupid.

The point of last week’s post was that IF we are able to get the founder to choose a date (actually, just a year) in the future, where he would no longer be involved in the company he founded, we could use that year as a reference point, or an anchor.

The idea is that just getting “engagement” is an important starting point, and if we don’t get to the point of engagement, then no real, worthwhile discussion of the issues will ever happen.

The title of the blog, “Under-Promise and Over-Deliver on your Exit Plan”, was used to highlight the fact that once a date is set, the engagement in the process can begin, and THEN, with time, the person would grow into the idea that there would be a future phase when he would leave the business to others.

As the person begins to “get” the fact that he will one day no longer manage, lead, and own the business, he will (hopefully) also buy into a future of great possibilities for himself, and look forward to this reality, and eventually agree to leave sooner than originally planned.

If you are really paying attention, you will have notied that the previous paragraph is actually a segue to answering the second question, that of understanding which date we are referring to.

That is where the title to this week’s post comes in.   An exit door represents a “one step” exit process, whereby the owner sells his business and in one fell swoop goes from “all in” to “all out”.

This does happen on occasion, of course, but is not common in the family business arena. More often than not in business families, when this does occur, it is almost always the result of an untimely death or other tragic circumstances.

A better scenario is almost always a phased approach, where the “exit door” is replaced by an “exit corridor”

The corridor is a place that one goes through on the way to the exit. The first door (to enter the corridor) is most often the day-to-day management of the business. The six-day work -week becomes five days, then four, then three. Eventually, coming in once a week is sufficient.

After management comes leadership; approving all major decisions is often the norm as you enter the corridor, but by the end, there is sufficient trust and confidence in the successor(s) to allow them free reign.

The final hurdle is usually ownership, where the person who was at one point the 100% owner of the business actually gets to be 0% owner.

That is the final exit, and does not always occur while the founder is alive, but that’s okay too. Just getting a founder to understand that they will not live forever can be a big step.

Traversing the corridor is a process that is usually measured not is weeks or months, but in years. That is also okay too, so long as there is a plan.