There are advantages to building a business to sell, whether you sell or not!
Entrepreneurs are known to have made plenty of mistakes. And not only on their first try. Particularly if you’re one of those crazy courageous people who has decided to start their own business, you’re keenly aware of the failure rate of small businesses, especially in those first years of operation.
But you also know that each mistake made is an opportunity to learn that provides invaluable perspective that may be a bit more difficult to come by if you haven’t made that certain mistake yourself and lived to tell about it.
That does not mean that trial and error is the best approach though. Where we can learn from the mistakes of others, we certainly should try to do so!
If you’re an innovator, as many entrepreneurs are, there’s a particular pitfall that may be easier to avoid than you might think if you’re aware of it and take steps to avoid it.
When it’s your company, your idea, your plan, it can be all too easy to fall into the trap of feeling like the one doing all the work needs to also be you. Even as you grow and begin to be able to hire key players, there are a couple of key questions to keep in mind throughout every phase of your business development.
- What would happen to my company if I never came back to it?
- What will happen to my company when I leave it?
These two questions differ mainly in the timing of the scenario.
The first is the old, “hit by a bus” situation. Even if you’ve managed to build a company from nothing (or something), that is operating smoothly and producing profits and happy clients, if something happened and you never darkened your office door again, would the company die without you?
It can feel a bit macabre if you want to look at it that way, and for some, that kind of feeling is not too far from the reticence that comes with thinking about advance funeral planning. It may feel more exciting and productive to focus on next steps for growth in the now than planning for one’s own demise, but if you think about it just a little bit, advance planning for one’s own funeral is one of the kindest things you could do for loved ones who will be left grieving at your passing. Lifting the burden from others by removing the responsibility of answering all of the questions is huge, and if you can pre-pay for even some of the associated costs, those closest to you will be able to focus on celebrating the good that you brought to their lives and the world, mourn your passing, and not be distracted by the stress that can come with funeral planning.
If you’ve built a company out of a great idea for a product or service that is answering a need/want of your customers, who will be the biggest loser if your solution is only around for as long as you are? Unless you’re wanting to hand all your happy customers over to your competition on a silver platter, doesn’t it make sense to put some time and effort into setting your business up to run with or without you?
Another perspective that should yield about the same result in considering and therefore planning for the future of your business is that if your business depends too much on you, you could end up being stuck in it, unable to enjoy the fruits of your labor or to sell it, even if you wanted to!
This brings us back to the second question mentioned above. What if you eventually want to leave your business? Like retire or something? Are you really planning to actively work in your business until the day you no longer physically or mentally can? Wouldn’t you like to have some time to relax a bit and release yourself from the everyday responsibilities of running the company you started?
Beyond the inevitability of the answer to both of these questions, is a whole other question about the quality of the business you’re building.
Even if you do plan for your business to only be around as long as you are for some reason, or if say, you’re designing it as a family business you want to pass down to a child or some other family member, what will you be leaving them with? A disorganized mess? A puzzle to solve? What if they decide that running the business you built isn’t what they want to do?
If, on the other hand, you build your business with selling it in mind from the outset, where are the cons?
From the very beginning, if you establish processes and procedures, a vision and mission statement that drives the why of what your business produces for others, specifically outlined job descriptions for each position required to run your company, signed agreements with consultants, contractors, partners, etc. that outline exact expectations, etc., if you were hit by the proverbial bus, could someone else come in and pick up the pieces and carry your business forward?
And if you decided you’d like to step back from working in your business, could you attract a buyer that could simultaneously release you from said responsibilities and provide you with the payday you earned by building your business so you could enjoy a leisure retirement?
A business built and managed properly can attract a buyer even if you’re still on top of the world working in it. Imagine that! How great would it be to find yourself with the luxury of deciding whether or how you want to sell simply because someone has approached you with an attractive offer?
When looking at how to build your business from any of these perspectives, it’s difficult to justify Not building with selling in mind from the ground up.
How much do you consider the end when you’re at the beginning or even in the middle? Do you have regularly scheduled opportunities to reevaluate your progress and how different the end may look after having pivoted to respond to changes in the marketplace, etc.?
We’re always here to have a conversation about it at the very least, and to help in any way we can!