Entrepreneurs: Is This Your Forever Business? Have you thought about when you want to sell your company? A lot of entrepreneurs think selling equates to retirement, but selling your business and retiring are not the same thing. Sure, some people sell because they want to play more golf, but many others sell because they want to go do something else.
Take Josh Latimer, for example. He started Birds Beware, a Michigan-based window cleaning business. He built his company up to $800,000 in sales and decided to sell it and move his family of three young kids (with a fourth on the way) to Costa Rica. It had been Latimer’s dream to get out of the harsh Michigan winters and raise his family in the sand and sea of Costa Rica. But he was not retiring. In fact, soon after selling Birds Beware, he started a software company from his new home in Costa Rica. He sold Birds Beware to have the mobility and the cash to go live somewhere else and do something different. You can hear his entire Built to Sell story here.
Moving the yardsticks
If retirement is not our goal, many of us plan to sell when our business reaches some imaginary milestone like $5 million in sales or a million dollars of EBITDA, but a funny thing happens when you reach your goal: many of us move the yardsticks.
In Latimer’s case, he was determined not to move the yardsticks. He considered Birds Beware his “training wheels business”, where he learned about building a company. He needed to start it to learn about the business-building process, but he also needed to sell it to have the capital and the freedom to go do something else.
When you build your first business, you have no experience and (usually) no money, so you bootstrap things. Instead of writing a business plan, you start selling things to see what sticks. You don’t make a marketing plan; you bid on some search terms and see if you can get a return. You don’t strategize over the perfect location; you start from home.
Do you have a corrugated metal roof?
Imagine building a house the same way you are building your business. With little money and no architectural drawings you’d probably end up with a flimsy shelter. I’m reminded of the scenes of refugee camps with makeshift structures built with corrugated metal roofs and no running water. They are functional, but hardly ideal.
Necessity may be the mother of invention but she doesn’t build with intent. So, you end up with a flimsy business that is duct-taped together. Could you scale it? Probably, but as any home contractor will tell you, it is a lot easier to level a house and start from a hole in the ground than it is to try and renovate an existing house that has been badly patched together over time.
So maybe this business you have now is not your forever business. Maybe you need to consider it your training wheels business – a good experiment, a petri dish of learning that you can sell and then invest the knowledge and capital in your next business.
Listen to my full interview with Josh Latimer to hear his secrets for maximizing the price of your business.
Read more about Josh here;