Selling a business to start a new one may leave you missing out on the real profit
“We want you to help us get our business ready to sell,” my clients said. “It’s been three years since we started this business and we’re ready to move on.”
“Tell me more,” I said. “Why do you want to sell the business? What are you going to do once you sell this business?”
It turned out that the couple were perpetual entrepreneurs. They’d both had several businesses before with varying levels of success.
This business had met all their projections and was profitable. They figured it was a good time to sell so they could move on and, in their words, start a couple more businesses that would generate income streams that would afford them a lifestyle in their late 50s where they wouldn’t be tied down to the day-to-day operations of the business.
So what’s the problem? You start a business, it makes some money, you move on and start another. It’s the entrepreneurial way. It’s smart business!
Or is it?
The problem with this scenario, which is familiar to many entrepreneurs, is that, in many cases, they’re leaving money on the table.
They’ve done all the hard work of creating and building a business, and when it becomes profitable, they sell it, get their seed money out and move on to the next flash in the pan.
Sure, they might even get a good return on their investment. But they’re leaving a business generating cash because they’ve gone through the desert and arid season of their business cycle and are desperate to see hard cash.
This is the typical hard life of a perpetual entrepreneur. Many spend their lives chasing gold and end up broke because they can’t stay focused long enough to enjoy the fruits of their labours.
I know the feeling. I’ve had a few businesses that I sold after a few years, only to regret it. I’ve felt the pull of new ideas – shiny objects – and the lure of ‘easy money.’
However, it’s never as easy as it seems.
The flaw of the entrepreneur is that many seem to have attention deficit disorder. They jump from idea to idea and never spend enough time to achieve success in any of them. Some seem to fear success. When a venture starts to become successful, they jump ship or even sabotage their success by moving on to another venture.
So, do we curb the entrepreneurial spirit in order to achieve success?
Occasionally, I have clients who need to slow down in their minds and remain focused on the task at hand, which is their current business. I need to remind them that the grass isn’t always greener on the other side.
Success comes through consistency. If we’re not consistent enough to show up for our customers, or if we decide to quit when we become bored with our current project, we’ll never achieve the success that comes with sustained efforts.
In many cases, curbing the entrepreneurial spirit is probably a good idea.
A hunter will tell you that a bird in the hand is worth two in the bush. When it comes to revenue generation, a business in the black is worth 20 in the red. Ideas for new businesses come easily to many people, but making them profitable is another thing altogether.
I encouraged my clients to think of ways they might enjoy the fruits of their labours and benefit from the revenue stream they had rather than trying to build something from nothing.
Through the brainstorming process, my clients realized that there was a solution that could give them the cash they need now and set them up for future retirement.
Dave Fuller is a Commercial and Business Realtor as well as an award-winning business coach and business author.
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