| This qualitative study examines the closing of retiring industrial design entrepreneur principals' firms by liquidation rather than by sale, merger, or succession. These principals do not, as other professionals and entrepreneurs in general do, have exit strategies in place, other than liquidation of the businesses. Design-firm principals say liquidation is not what they desire. The research indicates that among the driving forces of entrepreneurship are the recognition of opportunities with high potential, good risk-and-reward tradeoffs, and profitable exit possibilities. The research approach was to review the literature concerning the natures of industrial design and its professional participants, to investigate the ways other professional service firms prepare for exits, and to examine the forces that drive or compel them to exit. The final step of the research was accomplished by conducting 11 in-depth interviews with design-firm principals. The data was analyzed using cross-interview interpretations. The research premise is that industrial design principals do not take the usual business steps to plan exit strategies for three primary reasons: (a) structural elements in the profession, (b) entrepreneurial characteristics of industrial designers as designers and principals, and, (c) barriers rooted in business issues. Four theories emerged from the data. First, successful exit strategies are not implemented because of industrial design principals' belief that the value of their businesses lies solely within themselves. Second, the reason for the failure to plan for successful exits is the principals' unawareness of the methods and choices necessary to implement acceptable plans. Third, principals are dilatory in arranging exit plans. They wait too long in the firms' lifecycles, until the firms lose value. Fourth, without forces driving consolidations, mergers, or acquisitions the primary exits will be through some form of employee succession and purchase or liquidation. Design-firm employees who may be interested in buying existing firms usually start their own firms because of low entry costs and the absence of any barriers. |
