Have you ever looked back at a situation and said “wow, I wish I knew what I know now, then”? We all make mistakes that are lessons learned, and hopefully don’t make that same mistake again.
Being an entrepreneur is not always easy. There are a lot of factors that can play a part in the success of your business. A lot of mistakes are common and easy to make, and could potentially sabotage your success. Some mistakes you just have to learn on your own, but luckily, some of them you can learn from other people.
When you made the decision to open your business, did you stop and think about what you would do if there was a crisis in that business?
You should expect that when you own your own business, you are responsible and accountable when things go sideways. In fact, when you experience a crisis in your business, if you are not prepared, it can cause your business to falter and maybe even go into bankruptcy.
She asked me, “How do you stop commingling your money and start operating your business the right way?”
I did a Shop Talk on one of the biggest mistakes that you can make in your business. It was all about commingling your money – that’s when you start a business and you mix your personal and business finances.
Not long after that post, I received an email from someone who said to me:
“I really, really liked your Shop Talk video blog on commingling your money. My question is, if you are someone who is doing that, what is the first step to fix it? How do you stop co-mingling your money and start operating your business the right way?”
Recently, I was in a Facebook group where someone posted something about 6 and 7-figure businesses and all the hype people use around that in their marketing. This person talked about how they asked somebody about the profit margin in their business only to learn that their 6- or 7-figure business had a profit margin of around 15%.
I wanted to address this because sometimes marketing is misleading. I am a big believer that success leaves clues.
Alright, let’s talk a little bit about trading hours for dollars.
When did trading hours for dollars all of a sudden become so taboo? It’s like people think that working one on one with your customers is a bad thing. “Oh my God! I’m doing too many hours for dollars!”
Can you imagine if every single hairdresser on the planet decided to move to a leverage model and the only way that you could get your hair done is if you took their online program and learned how to cut your own hair?
You’ll never, ever, ever eliminate hours for dollars.
I recall when I was working for a start-up telecommunications company leading a retail team. We didn’t have any reporting setup in order to see what was happening in the business and my boss gave the task of setting this up to me.
She said… “We need reporting on ALL of this!”
The moment is clear in my mind because it brought up two very different emotions for me.
Excitement and intimidation!
The idea of getting regular reporting was exciting and intimidating leaving me suddenly feeling exposed. You probably feel the same way. You’re probably thinking…
You may be thinking this article might not apply to you but the truth is, selling your business or having it go belly up is a reality for many business owners.
Why is it that some people are successful in selling their businesses while others just close up shop and walk away leaving their equity and goodwill on the table?
When you start a business, usually the last thing you think about is an exit strategy. You think you are in it for the long run and sometimes you have huge visions of growth.
But the truth is, you work really hard to build your business and when the time comes to move on, if you have something of value, you should be able to pass it on to someone else and pocket some cash at the same time.
When I started The Organic Basket Company back in 2001, it was a home based business. I aspired to be able to grow this business into a coffee shop model, to maybe franchise and have stores all over the place and to retail gift baskets in many locations.
Then the grind settled in and although the business was generating about $30,000.00 a year (with me only working one weekend a month), after a while, the work became boring and did not challenge me intellectually.
I tried to bring someone else in to help me with the business but my profit margins were not really big enough for me to pay someone to do the work and keep some money for myself.
Then in 2006, I opened Parlez Wireless, an Authorized TELUS Dealership. The basket business continued to exist but my focus was completely moved to the new endeavour.
Over the next year, the basket business pretty much dried up and I sold it for a very small amount of money, basically enough to cover the cost of the products I had on hand.
In 2012, I sold Parlez Wireless. This time things were different.
The most important lesson from The Organic Basket Company was this:
When you lose your interest in your business, your sales will go down and your profit will deteriorate
The moment you feel you are not as jazzed with your business, start to think about whether or not you should consider an exit
Always exit at the top of the game, not after your sales have slid to the bottom
Two years before Parlez Wireless sold, I had begun my consulting business. This time, there was a team who could operate the business without me and the business did not decline the way the basket business did.
Inside though, I knew this was not what I aspired to do long term so I started making plans to exit. The difference this time was I sold my on hand inventory and walked away with actual money for the equity I had built in the business.
In addition, the business had solid operating systems, sales tracking, cash-flow tools etc, all the things you learn in The Pilot Project. It was a profitable business ready to go without a new owner having to put a lot of time and money into it. This made it more appealing to buyers and allowed me to sell it at a price I was comfortable with.
Just because you may not feel the interest anymore does not mean that someone else wouldn’t be thrilled to continue to build up momentum from where you left off. Build something really great and sell it when the value is still there.
Check out this Shop Talk Video on When to Pull the Chute and Sell Your Business for more tips and share in the comments – Have you ever sold a business?