HATTIE: So when should someone have an exit strategy?

JIM: Well, Everyone should have an exit strategy. After all, we're all going to exit, right?

HATTIE: Yes. (Voiceover) Jim Schell tells how he sold to key employees.

JIM: The seller sells the future; the buyer buys the past. So you want to try and make a case for the fact that, `Oh, if we only had such and such here, the business could go up somewhere.' And so the role there was for me to try and make a case for the fact that the business had all this potential so that the buyer would say, `Oh, wow! All I have to do is throw this at the business and it's off and running.'

HATTIE: Let's talk about how you sold that business. It's $2 1/2 million. It's retail; it's wholesale. It's in the sporting goods arena. How did you do it?

JIM: Because of the second business, I'd been kind of phasing out for a couple years, so customers, employees didn't even notice. And the buyers, the two key employees, I gave them the sweetest deal I could because I trusted them and they were friends and it worked out for both of us. And today, they're a very healthy $6 million company and everybody lived happily ever after. I took 10 percent down and I think I gave them 10 years to pay it off, because I knew it was going to work. They were good people, and they paid it off in three years--which, incidentally, is kind of a rule of thumb -- if you can't buy a business and pay it off in three to five years, maybe you're buying the wrong business.