Why Did You Start Your Business?Why Did You Start Your Business? https://c-suitenetwork.com/advisors/wp-content/themes/csadvisore/images/empty/thumbnail.jpg 150 150 MIchael and Bonnie Harvey https://secure.gravatar.com/avatar/dfe7dbddd973f4b41b9f0e9b47ad6323?s=96&d=mm&r=g
We always ask our prospective clients, “Why are you going into business?” This seems like a no-brainer, but many people who consider making the jump don’t really give it the thought it deserves. Your answer to this question can determine business goals, strategy, and even record keeping. We usually get a few standard answers: “Well, to get rich, of course!” or “I’ve always wanted to be my own boss” or “It’s always been my passion”. But none of these answers touch on the three concrete reasons why you can be in business. You can begin a legacy, you can create a job for yourself, and you can make money on your brand equity.
If you create your own job, your “paycheck” is only as much as time spent “on the clock”. You can’t get paid if you don’t work. Yes, you can hire outside help to keep up with things in your absence, but you are essentially trading time for dollars. You may even build equity that someone could pay you for. But this type of business runs on daily profits and income, without considering a long-term plan to make money on your brand equity.
Business owners who go this route usually say they’re “following their passion” and, well, they should! But many of these people also say they don’t ever want to sell their business, thinking they can do it forever. When the time comes, they usually sell because they need to, due to their health or age, or they are finally sick of the work. For them, selling is an afterthought to expressing their passion through a business.
Others who have “no intention of ever selling” think they are creating a legacy. They plan that their children will be a part of their business, and will want to continue this legacy. While this is a nice way to think about your family’s future as far as your business is concerned, only a few of these plans go beyond the first generation.
The last group, one that we consider ourselves a part of, is dedicated to monetizing their brand equity. They want to build a business that attracts acquirers, using their own concepts, ideas, and products. This group takes acquisition very seriously.
And this is the group we can help the most. From the beginning, these businesses are designed to have everything an acquirer wants. They grow into a sellable company. They can run without their owners. And, most importantly, they’ve been set up from the get-go to satisfy their acquirer’s due diligence.
One of the core values of the Barefoot Spirit approach to business is to just ask yourself why you are doing it in the first place. If it’s because you want to build and monetize your brand equity, then you need to think about who would want to acquire your company, when, and why. Organize your records, reports, and books, to replicate your acquirer’s due diligence. Invest your profits into expansion. And carefully decide when, where, and how you’ll grow in order to get your peanut in front of the elephant. This is an art form, and we shared what we learned about it in our Guiding Principles for Success.
From ideation to monetization, we’ve done it all. These are only a few business decisions that are greatly influenced by your choice to eventually sell. If you’re going into business to monetize your brand equity, let us help!