Dreamt of scaling up and owning a multi-million dollar business? Then this blog is for you!
In his book The 7 Habits of Highly Effective People, Stephen Covey talks about starting with the end in mind and envisioning goals as key traits amongst successful people.
As a small business owner with just the essential tools, a single ute and your skills as a tradesman, it can be hard to imagine owning and running a multi-million dollar business but it’s important to remember that most sizeable businesses were small once upon a time.
How do you work with the end in mind? How can goal setting keep you on track? And how can you ensure that your business will grow into a valuable saleable asset for when you’re ready to sell?
“Dress for the job you want, not the job you have”
While we don’t condone trading in your steel caps for a pair of Havaianas and setting up shop permanently on the local beach, we can still learn something from this quote.
It might be tempting to ease off on that tiny job for your great-aunt’s best friend but establishing yourself as a professional who delivers quality time and time again should be a priority from day one if you’re aiming to grow your business beyond just those odd jobs for friends and family.
The same can be said for your business administration practices…
Have processes in place
Keeping track of your receipts, your business finances and your payroll may be simple when it’s just you, but what about when you grow? A sudden influx of new clients can quite easily double, triple or even quadruple your workload. Are you currently set up to handle this? By establishing processes, policies and procedures from day one, you’ll always be on top of your day to day accounts and you won’t get caught out when your business starts to grow.
Set yourself an end goal
Setting a goal can be a scary thing – you can’t fail to reach a goal you’ve never set, but by the same token, how do you know you’ve succeeded if you haven’t set one?
When the day comes to put down the tools for good and enjoy a well-earned retirement, are you clear on how much you’d want to sell your business for?
Don’t be afraid to use your big business mindset when setting this number. It might be hard to imagine owning a multi-million dollar business, but if you take the right steps, it really is achievable. If a goal doesn’t scare you, it’s not big enough.
The important thing with goal setting is to be specific – have a timeline set out for achieving your goal and a way of measuring progress. Why not make it a journey? Where do you want to end this year, in 2 years time, 5 years time? Get yourself into the rhythm of setting and achieving your goals. You’ll be surprised how addictive it can be.
Make sure you have that bigger end goal in mind and keep asking yourself on a daily basis if what you are doing will help you reach it!
The final payday
A common mistake amongst business owners is to never establish an exit strategy and instead find themselves with no options than to just shut shop when they’re ready to put their feet up.
There can be serious money earnt in selling a successful business. So how can you make sure that your final payday is a big one?
It’s important to remove yourself from the equation to see if your business still has value. It’s fantastic to be great at what you do and to be loved by your customers, but a business isn’t saleable if it’s worthless without you.
What would a potential buyer buy your business for? Perhaps the physical assets like tools and machinery, your customer base or your business’ reputable brand. They are unlikely to purchase it, however, if it’s worthless without you.
A quick note on branding – it would be extremely difficult to sell Handy Henry’s handyman business to anyone not named Henry. In a similar way, you might face difficulty scaling Sunnytown Plumbing to include servicing other towns and suburbs, simply because customers don’t realise you’re able and willing to operate outside of Sunnytown. So make sure your business name doesn’t work against your exit strategy or limit the potential for growth.
But I don’t want to sell?
Selling your business might not be on your radar right now, but no one wants to work forever and, particularly for manual labourers, there may come a time when your body demands retirement. Executed well, a small business can grow into a sizable asset that can set you up for a financially-comfortable retirement spent lounging on the beach.
Need help setting your business goals and planning your exit strategy? The Tradies Accountant team provide business consultancy to help you think with a big business mindset. Contact us today!