Stacey Abrams and Lara Hodgson on Starting and Scaling a Small Business

STACEY ABRAMS: Self-doubt is often driven by fear, and I believe in the legitimacy of fear. We are exhorted — especially for women in business — that you’re supposed to be fearless. That is the dumbest advice because fears are real, and they are salient, and they come from something. And one thing I think Lara and I do so effectively is we confront the fear. We don’t ignore it. We don’t pretend it doesn’t exist. But we try to investigate the roots of it and figure out how we can befriend it, how do you navigate it, how do you leverage it.

[Theme music]

EMILY CAULFIELD: You’re listening to Women at Work, from Harvard Business Review. I’m Emily Caulfield.

AMY GALLO: I’m Amy Gallo.

AMY BERNSTEIN: And I’m Amy Bernstein. Stacey Abrams, whose voice you just heard, and her business partner, Lara Hodgson, met in the lunch line at a conference. They struck up a conversation, became friends, and went on to start three companies together. They learned a lot along the way. In their new book, Level Up, they share tons of hard-won lessons. By describing their successes and failures, they hope to smooth the path for other entrepreneurs, especially women and women of color. 

Lara and Stacey’s first business was a two-woman consulting firm. The hours were long, but the money and flexibility were good. Soon though they discovered the limits of sole proprietorship. There were only so many clients and projects they could take on — and the hours were getting to be really long. As they write in Level Up, “Scaling a professional service business is hard because you are the product, and your unit of value is time. Neither scale.” So, they began looking for an idea they could grow into a company that didn’t have the same limitations.

EMILY CAULFIELD: That’s when they started Nourish, a company that manufactured spill-proof water bottles that parents could easily mix baby formula into. After testing demand for the product online and in boutiques, Stacey and Lara attempted to get the bottles on grocery store shelves. In the process, they encountered a problem that afflicts many small businesses: large distributors weren’t paying invoices anywhere close to on time. The delays meant Stacey and Lara couldn’t pay their own suppliers and vendors. In the book, they sum up one of the lessons learned like this: “More businesses grow out of business than go out of business. Build in extra time and flexibility as you plan for the future. It will probably take longer and more money than you think.”

AMY GALLO: The cash-flow problems that ultimately forced them to close down Nourish inspired their next start-up, NowAccount. It’s a fintech company that buys a small businesses’ unpaid invoices and, for a 3%–5% fee, pays out the revenue owed — within a day. Over a thousand businesses have used Now to get paid. Stacey and Lara’s takeaway? “When something fails, mourn and then move on. The next opportunity is around the corner.” OK, now that you know a little bit about their partnership, here’s our interview with them. I’m not in this, but I’ll be back at the end of the episode.

EMILY CAULFIELD: Lara and Stacey, welcome to the show. We are so excited to have you on.

STACEY ABRAMS: Thank you for having us.

LARA HODGSON: Thanks.

EMILY CAULFIELD: I want to start with asking you about your experience. What do you think were the most important personal qualities that you brought to your entrepreneurship that made the difference in not only getting your businesses off the ground but then continuing to actually grow them?

LARA HODGSON: Without a doubt, I would say my two most important qualities are a curiosity for learning and a resilience/grit. And the second one I didn’t actually know I had until well into our series of starting businesses.

EMILY CAULFIELD: Mm-hmm (affirmative).

STACEY ABRAMS: I’d say for me, I am incredibly risk tolerant. I’m not a risk seeker, but I am very risk tolerant, which meant that when Lara had some just moonshot idea, that was always an important part of our relationship. I didn’t start out in entrepreneurship. When we met, I was a lawyer. I was very happy with paychecks, and so moving into entrepreneurship was a risk for me. And even though I’d started my own small company, going into business with someone, making it a permanent thing — rather than returning to a steady paycheck — was odd for me, but it was the risk tolerance piece. And then I think one piece that always drew Lara and I together is this curiosity: loving to learn new things, wanting to understand how things work and how to make them better, what a solution might look like, what new information might add to the equation.

AMY BERNSTEIN: Stacey, you said that your tolerance for risk and your shared zest for learning were important to the relationship that you and Lara have as you founded companies together. What is it that you would tell our listeners about how you make these partnerships work? We got a lot of questions about that. How do you guys make your partnership work?

STACEY ABRAMS: We started out with rules, and those rules didn’t come from longstanding friendships. A lot of partnerships begin with these long-term friendships, and you morph into a business partnership. Lara and I were friends: we knew each other, we liked each other, we could reach out to one another. But our friendship was built more on a mutual respect than it was this longevity. But when we started working together, we had rules about how we would operate, what we would expect of each other. One of the most important pieces of who we are — and she can talk about this — is honesty. And my caveat is that we do not have only honesty but transparency. Honesty is telling the truth. Transparency is telling the truth before you have to. And we have a lot of transparency in our relationship where we don’t wait for the hard question. We don’t wait for the mistake to be uncovered. We get ahead of it. And that not only helped in our business relationship. It helps in our personal relationship with one another, but it also helps with our clients because we have this ethic that you don’t try to hide from bad news, but you also have to be honest about the consequences and the catalyst. And having a partner that you trust both emotionally and intellectually makes it much easier, and Lara’s one of the smartest people I’ve ever known. So beyond just being a good businesswoman, I trust her intellectual integrity, and that also helped us work together because even when we disagree, which happens, we don’t distrust the fundamental premise of the argument. We may disagree with the solution, but we don’t doubt the other one’s grasp of the challenge.

AMY BERNSTEIN: Mm-hmm (affirmative). Lara, anything to add to that?

LARA HODGSON: Yeah. I would agree. I think a lot of people have this best friend that they’ve grown up with and their lives are aligned on all axes, and then they start a business together, and you never have the space to step back from one another. Whereas Stacey and I, we didn’t necessarily go to the same church or have children in the same school. So, our normal week allowed us time together, but it also allowed us time apart, and I think that’s incredibly important because it preserves the diversity of our thinking. I think where a lot of partners go astray is they come together with diverse thinking, but then they spend so much time together that they actually lose their diversity. They lose that diversity of thought, and they start to think alike, and that’s dangerous. So, Stacey and I always had the ability to approach a problem, appreciate the different perspectives, and then continue to develop those different perspectives by allowing our lives to have some distance.

EMILY CAULFIELD: Yeah. So, in the book, you mentioned this idea of a sticky floor. You say that “sometimes what’s holding you back is not a glass ceiling, but rather a sticky floor. Don’t let your self-doubt overcome you.” Can you talk about whether or not the two of you dealt with this in starting your businesses? And, if you did, how did you deal with it?

LARA HODGSON: I think I deal with it every day, and women and underrepresented founders tend to constantly question, Am I good enough? Am I smart enough? Am I approaching it the right way? And I think that’s what is so valuable about our partnership because as individuals, you’re always going to sort of wonder, Am I missing something? Am I good enough? So, I think our partnership both keeps us grounded when maybe we’re worried about, Am I good enough? But it’s also there to keep you grounded when you’re going off in left field and you need someone to say, Bring it back in.

STACEY ABRAMS: One of the corollaries is that self-doubt is often driven by fear, and I believe in the legitimacy of fear. We are exhorted, especially for women in business, that you’re supposed to be fearless. That is the dumbest advice. Because fears are real, and they are salient, and they come from something. And one thing I think Lara and I do so effectively is we confront the fear. We don’t ignore it. We don’t pretend it doesn’t exist, but we try to investigate the roots of it and figure out how we can befriend it. How do you navigate it? How do you leverage it? And it’s easier to do that when you have a business partner and a friend, but it’s possible even if you’re on your own. Both Lara and I came to this having done other projects independent of one another and we brought with us both the fears that we had in those experiences, but also the learnings from those fears and our willingness to share that with one another; but also what we learned the last time, because part of the sticky floor is that you’re fighting yourself, and you’re fighting the legitimacy of those warnings. Fear exists because you’re trying to tell yourself there’s a danger. So, let’s make sure you’re not ignoring the warning signs. Instead, you’re investigating and preparing for the danger.

EMILY CAULFIELD: You both brought up an interesting point about being women in business. And I’m wondering if you feel like being women helped or hindered you as you launched your businesses.

STACEY ABRAMS: Yes.

EMILY CAULFIELD: Yes, both.

STACEY ABRAMS: I mean, there are doors that get cracked open just so they can see that you’re out there. It doesn’t necessarily mean they’re going to invite you in. And a lot of women experience this with programs that are geared towards women; and as a woman of color myself, there’s never the ability to leave behind the dimension of race when gender is also part of the conversation. Lara and I talk about it in the book that there have been moments where we’ve had to confront both pieces, where there are expectations that come along with gender, some of that come with race, some of that come together — and that the challenge is often trying to understand which -ism you’re facing, but the opportunity is understanding how you can leverage the diversity and the distinction of who you are to differentiate yourself. So as women in business, we often see problems in a different way. We are used to having to navigate and circumnavigate challenges. The same thing is true for people of color. So, I think part of what has helped our business relationship is that we bring our different perspectives from gender and these other dimensions into how we problem solve because we aren’t going to have access to the traditional resources. We’re not going to have the standard opportunities that others may take for granted. So, our responsibility is to figure out how do we get where we need to be, not despite who we are, but recognizing that what people see isn’t going to change even if we close our eyes really tight and hope they don’t notice. So, you decide how you’re going to leverage it, and you prepare for when it is used against you.

EMILY CAULFIELD: Right.

LARA HODGSON: Yeah. I would say I’ve always believed that your greatest strength is also your greatest weakness, and there are times when it’s your choice how to use it — meaning the mindset that you approach it with could determine whether that becomes your strength or your weakness. So, for example, I am very often, as you can imagine, on panels in the fintech space where I am the only female. And I would tell people that when I see that situation, I choose for being a female to be my superpower. And I mentally choose that.  I mentally say to myself, “I’m the only woman on this panel. That is my superpower.” What I mean by that is I’m not going to try to blend in. In fact, it’s quite the opposite. I’m probably going to wear a very bright and glaring statement necklace, and I am going to say something boldly that makes the audience uncomfortable, and I’m going to do that because you are going to remember me.

EMILY CAULFIELD: Yep.

STACEY ABRAMS: I think part of it is also whether what you’re addressing is structural and institutional, or situational. One of the reasons we wrote the book and one of the ways we’ve both operated in business and we both found our ways into politics and into organizations because we recognize that sometimes the short-term solution is situational, but the long-term solution is institutional. So, we also insert ourselves into the institutions. For a lot of small business owners, for a lot of women, we believe that it’s a bifurcated choice. We have to pick one or the other, or we are so overwhelmed by the systemic challenge that we abandon all hope, and we focus on the situational. What we want to encourage is this understanding that the institutional is just people. They’re really, really powerful people supported by less powerful people, supported by people who don’t think they can make things change. And I would like to say we’re instigators. So, part of the opportunity when you face those challenges is to insert yourself into the organizations that perpetuate them, and you don’t go in saying, “I’m going to destroy you from the inside.” You don’t come in as the conqueror. You come in as the inquisitor, and you get yourself inside, and you start to work, and you start to create change from inside. One of our, I think, most effective approaches is that we work from the inside out and from the outside in. We both come from different vantage points, but we carry the same internal messaging. We get points of entry that are completely divergent from one another, and then they’re shocked when they find out that we’ve met in the middle and both done our own to change the way things work. We sometimes let the size and scale of the challenge overwhelm us, and we become myopically focused on the situational to the exclusion of the systemic. But if we don’t fix the systemic, if we don’t address the systemic, the system just gets more hardened and better at being bad. And we have to understand our power to be both situational solution makers and institutional solutions as well.

EMILY CAULFIELD: Do you think the net 30 payment system is a systemic issue?

STACEY ABRAMS: Yes.

LARA HODGSON: Yeah. I think it’s absolutely institutional, but it’s an example of what Stacey just mentioned. Most business owners think it’s situational, and quite frankly, we did the first time we came up against it. A net 30 invoice is when you deliver your good or service to your customer and you give them an invoice that says you can pay in 30 days. So, we had started Nourish — two smart people had come together, we had built this business, and as we started growing and our clients were saying, “Well, can we have net 30?” Stacey and I thought, Well, sure, we’ll give you net 30; we know how to solve that. So, we went to our suppliers and said, “Well, if we have to wait 30 days to get paid, would you give us 60 days?” Seems like a great solution. Do the math. We proudly walked away thinking we’ve got this in the bag. And it wasn’t until that net 30 invoice didn’t pay for 60, 90, 120 twenty days. Our initial thought was that we messed up. That’s what we initially thought was, oh my gosh. I remember thinking, I must have missed a finance class at HBS [Harvard Business School]. I must have been sick one day when we talked about this. But that’s when we started to realize — initially when something goes unexpected, as an entrepreneur, your first reaction is, I messed up. I didn’t negotiate correctly. I missed something. But as we started to talk to other people, and they said, “Oh, you just have a working capital issue; everyone has that,” Stacey and I were like, Well, wait a minute. If everyone has this problem, then the existing solutions must not work very well. And that’s when we started investigating all of the assumed solutions, right? Looking at lines of credit and factoring and receivables finance. And as we peeled those onions apart, we discovered that it was a systemic issue.

AMY BERNSTEIN: Reading your book I learned more about financing a startup than I could ever have imagined. What were some of the sort of widely accepted practices that blindsided you two as you were getting your first business off the ground, and how’d you handle them?

STACEY ABRAMS: As someone who did not go to business school, it was all blindsiding. My first company was a small consulting firm. I had one client, and they paid me when I sent them an invoice. They sent me money, and it was great. So, the first time I sent an invoice and got silence for 30 days was astonishing to me because this was a major company, and so I expected them to be able to remit payment in a timely fashion. And in our business, I did accounts receivable, so it was my job to go and find our money. These big companies that absolutely had the resources to remit payment would not do so for want of a few pennies. That mismatch was confounding to me because I was taking time to call, which meant they had a staff person whose job, rather than cut my check, was to tell me to wait. And you could use the same personal hours to actually solve the problem, versus try to appease me or misdirect me. So, I think that’s one piece. And then the second, on the other side — and this is one of the reasons my curiosity and Lara’s intellect have always been such a blessing to me — I learned about all of these other financing mechanisms. I did not understand how one with no money could do so much, and how folks with money could do so little. If you understand the code, if you know how financing works, if you understand how to put together a piece of paper that says what you think… And I’m a lawyer. I’m a tax attorney! But a financing statement is a work of magic and alchemy. So, I became more familiar with these things, but always with a skeptical eye to, how in the world would someone who does not have the partner that I have, who’s giving me my business degree while I’m making her a lawyer, how do you navigate these things?

LARA HODGSON: Yeah. One piece of advice I would have — and I did this early on, was find someone who’s not a banker. The one thing I kept reminding myself is that banker that’s telling me what I should do has never run a business. They have never been in my shoes and almost missed payroll. So, find another business owner who’s been there, and find someone who can help you as a bookkeeper, a CPA, a finance advisor. But remember that when you bring that person on, their job is twofold. Part of their job is to manage the finances of your company. But the more important part of their job is to be able to explain it to you in common terms. So, I think one of the mistakes, a lot of people make is because finance is scary, they hire a finance person, typically someone who is a banker, and then they just abdicate finances to that person. And they just assume it’s covered and I don’t need to know it. That is the biggest mistake you could make in your business. You do need to know it. You do not have to become an expert, but that person’s job is to explain it to you in terms that you understand. If they can’t do that, they’re the wrong person.

STACEY ABRAMS: And ask questions. There is no shame in asking the elementary questions. When Lara and I started working together, I would sit with Lara, and we would be in meetings and having conversations. I would make a running list of glossary terms, and then I would call Lara. I’m like, “OK, tell me what this means? What does this mean?” We often don’t ask the question because we’re afraid that revealing our ignorance will diminish our shot at the money. If your idea is solid, asking thoughtful questions will not diminish the likelihood of their investment, but at the very least, getting their answers helps you get to the next person who might finance you.

EMILY CAULFIELD: I have a question from a listener that I’d love to throw into the mix. Lauren Sanford, she’s one of the owners of Two Little Birds Eatery in Rockport, Massachusetts. She wants your help navigating the customer relationship. Here’s her question: “We’ve had to raise our prices during the pandemic at our small restaurant because of increases in product costs. Some of our customers who we value and who have been loyal to us since the beginning have expressed disappointment with the higher prices. How can we maintain good customer relationships through the ups and downs of this economy?” Do you have any thoughts for Lauren?

STACEY ABRAMS: I go back to transparency. When you are a small business owner, you are aware of the universe of challenges. When you’re a customer, you’re aware of your moment of interaction.

EMILY CAULFIELD: Exactly. Yeah.

STACEY ABRAMS: But every person coming to shop, coming to eat, is experiencing the exact same challenge. It’s just in a different part of their life. So, the transparency of saying on your menu, “I know our prices are higher because we’re facing these supply chain issues. As soon as this gets better, we are going to reward you.” Doing something that, one, acknowledges the legitimacy of the pain; two, gives an explanation so it doesn’t seem like greed; and three, promises a remedy without giving explicit decisions because you don’t know yet what that’s going to look like. But what that does is, it brings your customer in and makes them a partner in your business. It makes that person eating with you… It’s no longer an oppositional relationship. It is solidarity, and it is in their interest to help you get through this so that they can get back to what they wanted. When you work towards creating not just customers, but common bond, people are much more forgiving of challenges. But when you pretend they don’t see something or you don’t see something, they may pretend they don’t see you.

EMILY CAULFIELD: Yeah.

LARA HODGSON: One thing I would add to the transparency comment is combining that transparency with a vulnerability. I’ll give you an example. A few years ago, our business was growing to the point where we had utilized all of the capital that we had to buy invoices. There were days when I would wake up praying that payments would come in before invoices came in because we were in a position to not deliver. To Stacey’s point, we could have tried to hide that, right? We could have, like, put the curtain up and bull-rushed our way through. Instead, I actually sat down, and I penned a letter to all of our clients. It said, “I want to thank you, I want to apologize to you, and I want to promise you. I want to thank you for being a loyal client through the last couple of years. We’ve so enjoyed servicing you. I want to apologize to you because for the next several weeks, we are going to fall short on our service promise. But I want to promise you that we have a solution in the works, and it is going to get better.” When I hit send on that email, I was sick to my stomach. I didn’t know how they were going to react. I was actually on a plane coming back from Boston, and when I got to 10,000 feet and I could turn my laptop on. My email just started pinging off the charts. It was all these customers saying, thank you so much for everything you’ve done for us. You’ve always been there for us, and we are going to be here for you.

EMILY CAULFIELD: Oh, that’s so nice.

LARA HODGSON: And I was literally in tears that people felt that strongly, but it took the courage to be totally vulnerable and say, “I’m not going to serve you right now, but here’s why, and I promise you it’s going to get better.”

AMY BERNSTEIN: What advice can you give our listeners about hiring and hanging on to employees in a moment like this — we’ve got this war for talent everyone’s talking about — when your company is still in its early days, and you really can’t compete with the same kind of benefits that the bigger players can offer?

STACEY ABRAMS: I believe in growing talent. One thing that we did by necessity that became part of our brand is that we would find people who were eager to learn, and we would offer opportunities not only for growth. We could pay you, but we would also give you these other options and opportunities that you couldn’t get somewhere else. Titles matter, and sometimes in lieu of monetary capital, social capital and influential capital work. So, I’ve tried always to bring people in, grow the talent I need, but that means having a tolerance for mistakes. A lot of small businesses and new businesses are very fearful of mistakes. One thing Lara and I have always been, we want you to be bold and innovative and if it doesn’t work, OK, let’s figure out why it didn’t work. But if you are afraid to hire new or young or inexperienced because you’re afraid of mistakes, then you’re going to stagnate your business. What I have found is that when you grow your talent, it is loyal, it is resilient, and it is forgiving.

LARA HODGSON: Yeah. The other advice I would give is, hire slowly and fire quickly. I know that’s counterintuitive because when you’re in a market like we’re in today, where it’s so hard to get good talent, you start to sort of panic and just hire quickly. The problem is, if you hire quickly, you might find someone with a great skill set, but you haven’t had the chance to assess their mindset. And the mindset matters more than the skill set, because as Stacey said, if you have the ability to sort of train and develop from within, there’s very few things I can’t teach you how to do, but I can’t teach you how to think. So, hire slowly so that you can assess mindsets, and then fire quickly when that mindset is not a match.

EMILY CAULFIELD: Right. Whew. OK. So, let’s talk about the importance of creating a network and a safety net. You wrote about this in the book that it’s pretty daunting or can feel pretty daunting for a lot of people to pick up the phone or send that cold email, but you can’t let that hold you back when you’re trying to grow a business. So, from your experience with doing that, what sort of opening lines or framing typically leads to creating the connection that you want to create?

LARA HODGSON: Well, I’ll start because as Stacey knows, I’ve never met a person that I won’t talk to. When I cold-call somebody or I reach out to someone I don’t know, the mistake most people make is that when you get someone on the phone you launch into what you’re selling or what you offer, or the solution you have. The problem with it is that that’s about you, not about them. So, what I’ve found to be most successful when you’re reaching out to someone that you don’t know is to start by framing the problem — the shared pain that you know that they have — because if you can build that connection on a shared problem or pain point, that connection can allow you to then build on collaborating about your solution. But if you launch in with the solution, it’s the wrong perspective. You’re too focused on yourself and not on the­ listener.

EMILY CAULFIELD: Yeah.

STACEY ABRAMS: I would add two pieces. One is that we have a tendency to tell ourselves no. We knock ourselves out of the game before we even start. As someone who is not shy, but incredibly reserved and not a huge fan of a lot of human contact, one of the diametrical parts of our relationship was that yes, Lara will walk into a room and talk to anyone. I’ll be there. And eventually, yes, I will do it, but what I had to navigate — because I have this other job, this other life in politics where apparently, you’re supposed to say things out loud — I’ve learned not to worry necessarily about the response. I have no control over what someone says back to me. I can only control what I put out there. So, to Lara’s point, do not start with you. Start with them. Number two, do your research. Don’t become a stalker. It’s not about reciting their lives like Wikipedia, but it is knowing enough to know if this is something they’re going to care about. By doing your research, you actually refine how you are thinking about this connection you need. And then three, under-promise and over-deliver. And that even includes just basic communication. Do not say, “I’m going to follow up with you tomorrow,” if you know that tomorrow you’ve got two soccer games, a quidditch match, and something else. Instead, say, “I would love to follow up with you soon.” Give yourself the space to be able to meet your obligations because that interaction, that engagement is going to also determine the longevity of the relationship you build. One thing I’ve always respected about Lara, and that I try to always emulate, is that we’re going to be clear about what we can do, what we can’t do, and when we can do it, because when you’re building this relationship, we always think about the first moment. That first interaction is the least important one. It’s the one after that and the one after that, because the first one is to get their attention, but to keep their attention and to build trust, you’ve got to meet your obligations. And that means giving yourself the space to be successful.

EMILY CAULFIELD: Yeah.

AMY BERNSTEIN: Let me switch gears a little bit. Some women start their own businesses in the hopes of gaining some flexibility or control over their own schedules. In your experience, how realistic is that?

STACEY ABRAMS: I do not believe in work-life balance. I believe in work-life Jenga. Work-life balance is a lie. It is a lie. It is a lie from the pits of hell. Work-life Jenga instead acknowledges that you are going to be trying to make all of these pieces work, and being your own boss ignores the fact that someone’s still telling you what to do, even if it’s you. We’ve got to enter it with the right sensibility that yes, it gives you more flexibility, but flexibility is a limited term. It’s always about, what do you prioritize? How do set your priorities? And being honest with yourself as the boss about what the other parts of you are going to need? I don’t have children, and I don’t have a husband. (He’s out there somewhere. I’m hoping he figures out where I live.) But I have parents who are raising my niece, so part of my obligation was the financial stability they needed. So, when Lara and I were working together, when we started our businesses, I was very honest with her about the flexibility I needed to sometimes take on additional jobs because I didn’t have the luxury of not having a steady income when we weren’t able to draw a salary. So, it’s being honest about what the constraints are, but also being intentional with yourself as your own boss about what the other pressures on your time will be. But don’t lie to yourself. Don’t pretend that things are going to suddenly be fixed because you get to wake up at 8:00 AM instead of 7:00 AM, and the world is going to be different because you’re in charge of yourself. No, you’re just shifting responsibilities. You’re not eliminating them.

EMILY CAULFIELD: Yeah.

LARA HODGSON: Yeah. I think for me it was becoming a mother and wanting to have this flexibility that was the catalyst for me starting a company. I can honestly say I work more for myself than I’ve ever worked for anyone else. But I think where there is flexibility is how and when I work. So, my mentality has always been forget balance and strive for optimization. For example, if I have a board meeting you’ve got me for two hours. You better be prepared because for those two hours, you have all of me. I’m not checking my emails. I’m not checking in with work. I’m not texting. I am all in. But the minute I leave and I’m with my son, I’m all in with him, and I’m not checking emails, and I’m not texting. So, I think to Stacey’s point, one of the things particularly women have cornered the market on is guilt. We layer more guilt on ourselves because I’m at work, but I should be with my child. I’m helping my parents, but I should be doing work. I think where that guilt comes from is when we draw this line and then we cross it, or we allow another person to cross it. So, I think being intentional about where your line is and holding that line will both remove the guilt, but it will also allow you to do a lot of things and optimize your time.

EMILY CAULFIELD: When do you think is the right time to start thinking of an exit strategy from a business?

STACEY ABRAMS: I will say the least favorite exit strategy is the failure of a business. So, I would put that at the bottom of the list of exit strategies. And so, part of the exit strategy is being ready to leave when you know you’ve done not only your part, but you’ve created your own irrelevance. When you no longer can put in what the business deserves or when there is someone who can do a better job at what you do than you can. I no longer work day to day with NowAccount. I am still a shareholder. I serve on our advisory board. I do consulting work for the company, but I am no longer in the day-to-day operations, and that happened because I had this other life that took precedence because I wasn’t essential at NowAccount. I was essential at my other job.

EMILY CAULFIELD: We’ve seen. [Laughs]

STACEY ABRAMS: Well… [laughs]

LARA HODGSON: And I would say there’s two ways to think about an exit strategy. There’s your personal exit strategy, and there’s the exit strategy of the business, and all too often, we conflate those two things. They are not the same. The best time to think about the exit strategy for the business is actually while you’re starting it because at the end of the day the exit strategy is, have you accomplished the outcome that you wanted to accomplish, and [whether or not] a certain strategy allows you to get to that accomplishment. So, I think for the business, you need to start thinking about the various exit strategies on day zero because those will guide the decisions that you make along the way. For example, if your exit strategy is you think you’re going to sell your company to some type of buyer, you should know what that buyer is going to value as you’re investing because otherwise, I’m actually reducing the value of the company at its sale.

AMY BERNSTEIN: This has been great. I’ve learned so much. Lara, Stacey, thank you so much for joining us.

LARA HODGSON: Thank you for having us.

AMY BERNSTEIN: That’s our show. I’m Amy Bernstein.

EMILY CAULFIELD: I’m Emily Caulfield.

AMY GALLO: And I’m Amy Gallo. Our editorial and production team is Amanda Kersey, Maureen Hoch, Tina Tobey Mack, Rob Eckhardt, and Erica Truxler.

EMILY CAULFIELD: Thank you to the several small business owners who contributed questions for this interview. Special thanks to the women whose questions we ended up asking: Lauren Sanford, of Two Little Birds Eatery; Rachel Bachmann, of Akiri Consultants; and Ivelisse Morales of the branding and design agency Bombilla.

AMY BERNSTEIN: If you found this episode insightful, we hope you’ll share it with the entrepreneurial women in your life.

AMY GALLO: Before we go, I want to let you know that in April I’ll be hosting another round of The Essentials, which is a Women at Work series that covers fundamental career skills. In each episode, an essential worker joins me in a conversation with an expert on a particular skill. For example, in one episode, an elementary school principal and a social scientist shared their knowledge about giving feedback. So, keep an eye out for The Essentials. Better yet, follow the podcast to receive a notification when those episodes are published.

EMILY CAULFIELD: Finally, get in touch with us by emailing womenatwork@hbr.org. And for more coverage of women and work, subscribe to our newsletter. Sign up by going to HBR.org/newsletters.