One tough part of entrepreneurialism is not only working out if you have a good idea, but also establishing if it has the capability to scale, get acquired, or go public. If the answer to any of those questions is "no", then it's essential that you establish what your long terms goals are. If you are not able to achieve liquidity, then the performance of your profit and loss account will be the only business metric that matters. It also means that, should you wish to move on in the future, you'll have to give up your businesses profits with no realizable gains.

One key part of entrepreneurialism is planning your exit strategy. Although your business may change routes along the way, having a solid plan to work from can often pay dividends in saving wasted time, energy and money. If you wanted to start a broadband business, for example, then it would be easy to think of potential companies that might want to buy you at a later stage. And, the market is certainly big enough to go public if you manage to gain a decent percentage of market share.

However, entrepreneurialism isn't always that simple. Some companies may have a completely new idea taking on a completely new market. In this instance planning your exit can get a little bit trickier. It's less likely you will have direct competitors who would look to buy your business, and therefore you have to consider the likelihood of achieving liquidity through an alternative route.

Maybe a potential buyer would be able to achieve synergies through selling your product to their customers, or integrating it with their existing technologies? Or maybe if you manage to promote entrepreneurialism within the boardroom, a management buy-out could be an option?

The following are options to consider when planning your exit:

IPO

An IPO or initial public offering is when you make your shares available on the stock market. This is usually the most liquid market for equities, however you will usually require a sizeable market capitalization and stable earnings before this is an advisable option. At this point, there will be a firm price associated with the equity you own in your business.

Acquisition

If your company gets acquired then you may be able to get a much quicker exit than if you hold out for an IPO. If you intend to develop great technology, but do not want to build the infrastructure to unlock its full potential, this can be a great option. Sometimes entrepreneurialism can be about doing what you do best, and then moving on. For some people, that's starting companies and taking them to a certain stage.

Sell Your Equity

It's possible for you to sell your equity while allowing pre-existing investors to keep hold of theirs. You may find that pre-existing investors are the best people to approach in this instance. However if the company has potential, a large pool of potential candidates may be interested. The board may also consider a share buy-back.