Entrepreneurs should plan exit strategy early

Olin professor shares advice in Octane magazine

Clifford Holekamp, senior lecturer in entrepreneurship at Olin Business School at Washington University in St. Louis, admits his advice may sound strange, but he speaks from experience.

He tells entrepreneurs in an article published this month in Octane, the quarterly magazine of the Entrepreneurs’ Organization, that it’s important to plan how to leave a company while planning to launch it.

“When I founded my chain of podiatry clinics in 2001,” Holekamp writes, “I naively believed that I would be running it for the rest of my career. An unexpected buyout offer in 2007 changed those plans. Fortunately, while I didn’t plan on selling, I did plan for selling.”

Holekamp is founder and former president of Foot Healers Podiatry Centers, an innovative concept that combines a podiatrist’s office with a foot health products store in a retail setting.

After opening five locations and winning several awards, including the “2007 Outstanding Entrepreneur Award” from the St. Louis County Economic Council and recognition from Inc. Magazine, Foot Healers was acquired by an investment group.

In the Octane article, “Keeping Your Exit in Mind,” Holekamp outlines steps to take in order to build a new venture worth selling. From operations to legal advice, Holekamp says planning to make your business independent or not completely dependent on its founder is crucial to creating an efficient operation that will appeal to outside investors.

“From the start, I designed and built the organization to function without me,” Holekamp writes. “While entrepreneurs are admired for their hands-on approach, if a business doesn’t run properly without the founder personally flipping the switches, then it would not be of any real value to someone else.”

The entrepreneur who joined the Olin Business School faculty in 2008 covers marketing, accounting and intellectual property issues in the article. Planning ahead in these areas is vital to a new business as well as important selling points to potential buyers, according to Holekamp. “For me, the end goal was not to build a business that I would want to sell, but to build a business that others would want to buy,” he says.

Holekamp’s article in its entirety is available on the Octane website at eonetwork.org/knowledgebase/octane/interactive/OctaneDecember2010/index.html.

Holekamp will be featured in another publication in January 2011. The St. Louis Business Journal has named him one of “40 Under 40” honorees for 2011. The Journal received a record number of nominations — more than 450 — for the awards that are based on career achievements and community work of business leaders under 40 years old. The 2011 honorees will be profiled in the Jan. 28, 2011, issue of the St. Louis Business Journal.

In 2009, Holekamp initiated the Danube Venture Consulting Program, an entrepreneurship course at Olin that involves traveling to Hungary to consult on projects with a private equity firm in Budapest.

When not mentoring college and graduate students, Holekamp is involved with the education of much younger students at City Academy in St. Louis. Holekamp is chair of the education committee, a member of the executive committee and vice chair of the board of trustees for City Academy. City Academy is an elementary school dedicated to providing a college preparatory quality education to the children of north St. Louis.

Prior to his career as an entrepreneur and educator, Holekamp worked for IBM. He earned an undergraduate degree in journalism with a concentration in management from Washington & Lee University in 1996 and an MBA with a concentration in entrepreneurship from the Olin Business School in 2001.