Going Long - Part 8

When the index cards fill up, she knows she's good for a while and can focus on other things.

Once or twice a month it's good to take a deeper look at the business and record some metrics that should be improving over time. The kinds of things you'll probably be interested in are more detailed sales figures, site traffic and social media, and the growth of the business. You can get a free spreadsheet to help with this process in the online resources for this book at

Built to Sell: Going Really Long

John Warrillow built and sold four companies before “retiring” to write, speak, and invest. After learning his lessons through those four experiences, he now advocates a specific model for owners of small companies who wish to sell their business one day. Most of John's recommendations relate to the need to create an actual company or organization that can thrive outside the business owners' specific skills.

In other words, the built-to-sell model is different from the model we've looked at in this book. Many of our case studies involve people who went into business for themselves because it was fun, not because they wanted to build something and then cash out. However, John's recommendations are solid for owners who want to pass a business on, and some of them can be adapted to improve a business even if you want to stick around. You can see how the two models compare in the table below.

BUILT TO SELL — $100 STARTUP COMPARISON

Going Long

In trying to decide which path to pursue, the simple question to answer is: “What kind of freedom do you want?” John's model is all about creating an entity apart from yourself and then selling it for a big payday. The $100 Startup model is more about transitioning to a business or independent career that is based on something you love to do — in other words, something intrinsically related to the owner's skill or passion. Neither model is better; it just depends on your goals.

If you'd like to have the option of selling your business one day, John's point is that you have to plan for it by taking specific steps. The most important step in creating an independent identity for the business is to create a product or service with the potential to scale. This is an important distinction from many of the businesses we've described thus far, so let's take a look at how John explains it.

Going Long

A scalable business is built on something that is both teachable and valuable. A CPA provides a highly valuable service, but it isn't easily teachable (she can't just bring someone into her practice and hand it over to him).

Add comment


Security code
Refresh

Copyright © 2018 TheoryBiz.com. | "The Theory of the Business"