Building a business is like writing a story. The best ones have a start, a middle and an end. The top writers always sit down and plan the story long before they start writing. How’s it going to start? Who are the main characters? What’s the relationship between them? And of course, do they ride off into the sunset together?

You must also treat your business like that. By planning a strategy and continually revisiting it every so often, you will get more from your business. In order to get the best from your business you need to have something to aim for. Meandering along from day to day is a sure fire way of your business going stale and ultimately not getting the best price for your business when it comes to exiting. It doesn’t mean you can’t be pragmatic and take your business in a different direction. Most of the long standing businesses in the world have evolved over time, such as the famous Wrigley chewing gum company, which was started in 1891 by William Wrigley Jr. It was originally selling products such as soap and baking powder. The company then began packaging and giving away a packet of chewing gum in every box of baking powder. The chewing gum became so popular that the strategy of the company was changed, they now trade in over 180 countries so you could say it wasn’t a bad move.

The Start
This is the most difficult cycle in my opinion. This is about having the guts to go for it, pack in your well paid job, the fear of the unknown. Will it work? What will people think? Will people want my services?

A friend of mine set up a business based on the fact he knew of another company in the same industry whose strategy it was to acquire competing business’s. He set it up ran it for 18 months and sold it for quite a substantial sum. He set up with the sole intention of selling it within a 2 year time frame, which he did and made a lot of money doing it. Now this is a one off scenario, but setting up a business with an exit strategy in place is not only sensible but essential.

The Middle
Right, you have started your business and you know where you want to be, this part is the journey of getting there. You may well have done better than you expected or you may have taken longer than you thought. As in a story there are twists and turns, nothing in life, especially in business, is predictable. If it was we all would be billionaires heading up huge companies.

I class Castledene at this stage, I have definitive plans of where we want to be and how I intend to get us there. I have in my top drawer a list of aims and objectives I want to achieve in the next 6 months and what my ultimate goal is. I have a look at it pretty much every week to see if we are on track and to see if anything needs tweaking or changing. Just like the Wrigley story you can change strategy at any point, so long as you are doing it for the right reasons.

Having a definitive schedule for where we want to get to is, in my opinion, invaluable. Anything that can help motivate you on those dark days where nothing seems to go right, or you just cant be bothered (it does happen to all of us) is priceless. Apart from the motivation factor, it helps focus a strategy for growth of your company. You can then break it down to mini aims and objectives i.e. take on new staff member in the new year or increase sales by 10%. It doesn’t have to be huge aims such as buy this company or sell that part of the business.

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The End
All good stories have a happy ending, every one like to see the bad guy caught or the hero gets the girl and business is the same. You have worked you butt off for 5, 10 maybe even 20 years, late nights, weekends and what can be more satisfying than reaping those rewards when you come to sell your company.

Some people might even want to pass the business on to their children, but I have heard many stories of people preparing their kids to take over the family business and their either not up for the job or they just don’t want the responsibility. What happens if after 20 years of thinking your son or daughter will take over the family business and they say,” thanks but no thanks” you have wasted years, maybe even knocked back a few offers for the business, for nothing.

You can't keep working in your business for ever as what’s the point of being the richest man in the graveyard? So the option is sale, but sales are not something that happen over night and after buying a few other letting agents recently, I certainly know this for a fact. You would always want to get the best price for your business wouldn’t you?

You HAVE to groom the business for sale in order to get the best price possible. Lack of preparation is the single reason as to why 70% of business advertised for sale fail to sell. Lack of preparation or foresight should not the reason why you did not realise the valuation you expected for your business sale

By having an idea of how and when you want to exit the business you can put plans in place at an early stage. I have always started businesses with a view to selling them at some time in the future and the same is at Castledene. It might be 20 years in the future but I always have a plan.

Regards

John Paul

 

John has written a LHA E-book that is full of tips and tricks that can be used to improve your cash flow and understanding of Local Housing Allowance. It is a must for any landlord dealing in this sector. It can be bought HERE

Get Ahead with LHA Imagine, month after month, having money deposited into your bank account, with almost no chasing the rent and little tenant support—ever. What an easy way to earn a living that would be! You can have that life. I'll show you how. If you're serious about your property business in 2012 and you have LHA tenants, you will get this report, right now and read the report today!