When evaluating a company you’re considering to commit your time and energy to, you must gain a better understanding of the owners’ vision of their company’s lifespan.
At the end of the day, identifying an owner’s exist strategy will give you an insight to whether or not their vision on this matter aligns with your future goals.
Some owners start a company to sell it. Some start a company with the intent of taking it public. Some have no exit strategy at all.
Instead, they have a legacy strategy and intend on passing their company down to the next generation in their family or executive team.
One approach is not necessarily better than the other, but knowing what you are getting involved in will, at least, give you an idea of what to expect.
If an owner starts his or her company with the intent to sell, the begging question is, when?
Just recently, I saw a news alert that an older well-established network marketing company bought out a smaller younger company that’s been struggling.
So I reached out to a friend of mine whose company got swallowed up by the larger company to check in on him.
While he was acting super excited on social media about this merge, he privately shared with me his disappointment saying he is already looking to find somewhere else to go.
Have you experienced something like this before?
It’s not far fetched to happen that you wake up one morning, log onto your back office, only to find yourself in a whole differently designed back office, with a different company name, different logo, with a whole different look and feel.
When you finally figure out what just happened, you realize that you’re a rep in a new company which you never joined in the first place.
It was forced on you — whether you like or not. You didn’t have a choice. You didn’t have a say.
So you feel betrayed but you are expected to be excited and all hyped. And you’re mentally out while overtime you get jaded and are either spun out or stick it through. Hopefully, you are a survivor and start looking for a better company to move to and build.
Things happen and sometimes companies have to do things like this, sell out or merge with existing competitors.
Company owners may find themselves in a financial predicament where they have to make a drastic move, such as selling or merging, even if that was never their intention.
There is no way for you my friend to predict or prevent this kind of a risk.
The day you join a company, is the day you agree to the company’s terms and conditions that include legal clauses to the company’s rights to make these types of decisions and changes.
But what if the owners’ ultimate objective from the get-go is to build a network marketing company in order to sell.
The question to ask then my friend is: “When?”
When do the owners plan on selling the company? What’s their projected life-span of the company? 2 years, 5 years, 10years?
At what point, and what part of the company do they plan to sell? Maybe they only plan to sell a devision or a section of the company.
We’ve all probably heard the saying: There is one thing constant in life and that is change. Thats is true.
But I have another saying up my sleeve for you regarding change as it relates to our business.
Change in network marketing is BAD.
I will elaborate more on this saying another time, for now let’s stay focused on today’s topic.
Company mergers or buy-outs don’t always pan out to be good.
While it may hold positive outcome expectations for leaders who stay in and stick it through, the initial impact on the field is colossal and you loose a lot of people.
When a company sells, anything can happen. The transition can be structured in any number of ways that impact you directly.
If it’s a merger, which staff members move from the old company to the new? Which products come and which go?
What changes will you experience in the compensation plan?
These types of changes and others can completely pull the rug out from under you and you’re already on your butt with a your team falling apart.
Even if the situation was not a merger but was just a buyout, you will still have to re-recruit every person on your team into staying with the new ownership.
New ownership means a re-evaluation of whether or not someone wants to stay no matter how its pitched or sold by the company or up-lines as a good thing . . .
If a company goes public, then now there is a board of directors calling shots and outside forces making decisions based purely on profits and losses with little regard for the people who’s livelihoods depend on the stability of the company.
Those investors may or may not have any experience in network marketing and have one thing in mind, making money for themselves. Their loyalty is to the bottom line, not the people who invested their lives to build it.
Investors rarely understand the value in paying the sales people more, instead they focus on taking bigger quarterly dividends. After all, where do you want the money going? Wall street or Y’all street?
If company owners have no intentions to sell or go public, what is their long term plan?
Look, owners get old. Owners can get bored. Their interests and motivations can change over time too. So where you stand in all this is a great question.
An entrepreneur’s reason why they started the company may not be enough to keep them running it.
Some people are geared to want to start companies while others are better suited to run them.
Just like a distributor’s initial reason why they got started may change over time, so can the owners’.
What’s the owners plan to pass the torch?
Who are they grooming to take over operations and responsibilities when their hair turns grey? There are all great questions to ask.
Hopefully . . . the owners of the company you’re in or evaluating have a long term plan to build and grow the company for decades.
Hopefully . . . they plan to keep the money in the “family” and flowing to the field.
Hopefully . . . they also think like reps who are always looking to train their replacement and duplicate themselves.
Owners who want to grow their company long term, pass the baton to competent and deserving leadership when the time comes.
When they transition out, they transition in a safe, consistent, and stable environment for the people who have committed their time, energy and loyalty to building the company’s legacy.
So the right question to ask:
16. Do the owners have an exist strategy, if so what is it?
Questions 1 to 15 are discussed in my previous blog posts. To learn more about what you need to know before joining any MLM company, you can follow my posts on medium here.
Till next time,
Charles
Co-authored with Dr Maral “YESS” Yessayan, PhD.
P.S. You can always find me on social media: Facebook or Youtube
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