Chapter 1
What I wish someone had told me starting out
Probably the one thing that I wish someone had said to me before I started my
own business was “... yeah, that's all great but how are you going to get OUT of
the business ?”. In simply terms, what is your exit strategy ? My exit strategy
? You must be joking, I would have said, I want to do this for the rest of my
life. Hmmm...that is all well and good but working in your own business for the
rest of your life is only one possible scenario. So many OTHER things things
could happen along the way that may cause this to change, many of which you may
not have any control over.
Don't get me wrong, I still want to work in my business for the rest of my life
BUT what happens if I don't ? What happens if my circumstances change and I need
to get out ? What's is my strategy ? If I try and sell my business would I get
the value that I have invested in it ? Probably not. A great book that deals
with this issue is the E-myth by Michael Gerber. He basically
says, what do you have if you can't take holidays when you like, when you can't
afford to have a day sick and you are always behind on your work ? You don't
have a business you have a job! Which is exactly the thing that most people who
start a business are trying to get away from !
It wasn't until I read Gerber's book that I realized that I didn't have an exit
strategy. Again, not because I needed one but because it provided me with
options. When I started to look closely at my business, through a buyers eyes, I
realized that the business didn't have nearly as much value associated with as I
thought. A good example of this was my accounts. I had developed all my accounts
in a spreadsheet that I designed myself. It worked really well, was flexible and
I knew the ins and outs but if someone from the outside looked at it they would
say it wasn't standard and they would want something like Quicken. D'Oh! How
stupid of me. I'd made that part of my business unattractive to a potential
buyer and therefore destroyed value.
When I started looking at the business as a whole through a buyer's eye I
realised that my accounts weren't the only place where I'd been destroying
value. Every where I looked I had custom one off systems, lacking documentation
and procedure. It wasn't that the business didn't function successfully, the
problem was all the best bits where in my head. That is all well and good until
you try and exit the business. You can't simply dump your brain into the new
owner's and move on.
Now I had to start the long ( and still on going ) process of getting everything
out of my head and down on paper. I am now constantly working to add value to my
business for a potential buyer. I can tell you that it is a right pain in the
butt and I wish that someone had made me think about my exit strategy before I
got into my own business. So take heed from me. If you are planning to go into
business for yourself, plan an exit strategy first, even if you never need it,
it is always reassuring to have.
Next >>
[ Home | Mentoring | CIAOPS | CIAOPS Tech ]