Saturday, December 20, 2008

Why start a business?

In these failing economic times many small business owners are probably asking themselves why they started their business. That doesn’t achieve anything because it is examining the past, besides I’ll give you the answer. Actually, I’ll let someone else far more qualified than me give you the answer:

 

“there is ultimately only one reason to create a business of your own, and that is to sell it!” – E-Myth Revisited, Michael Gerber ,P152

I will admit that for many years I never ran my business like I was going to sell it but I learned that you need to. Even if you choose not to sell your business you STILL HAVE THE OPTION if needed.

 

In this economic environment plenty of small businesses are going to think about cashing in their chips, but guess what guys? The pile of chips is only a tiny fraction of what you believe it to be. Why? Because the business depends on a single person, you. Unless you have documented and created procedures for the way you business operates and the business can run without you it is not going to be appealing to buyers. Simply reverse the situation and ask yourself whether you would buy your business? If so what would you pay for it as an outsider?

 

So if you are not making your business more “sellable” everyday what the hell are you doing? I’d say that you simply have a job or at best, a hobby. You need to run it like you’re going to sell it – end of story. The sooner you start seeing a business as something that you continually need to add value to the sooner you’ll start adding value.

 

Times change and unforeseen situations arise so if you optimize your business to be sold at any time, then you have far more options that most small business people I know.