Last month I celebrated being in business for 30 years.
Here is lesson 3 of the 10 biggest lessons I’ve learned from being in business for 30 years.
Click the button in the middle of the video above to watch.
Transcribe of “Top 10 lessons from being in business 30 years – Lesson 3”
Building an exit strategy
– Hi guys, Neil Waterhouse. Today I want to share with you my number three lesson I’ve learnt from being in business for over 30 years and selling online for over 20 years. Now these lessons, they’re not in any particular order as I think they’re just as important as each other. Okay lesson three, and I have to admit when I was first told about this lesson, my eyes simply glazed over. I took no actions on this lesson for must have been just over 10 years until it finally hit me. When I got this lesson, it completely changed my business and my life. I learnt this lesson from my accountant over 30 years ago when I was living in Sydney.
This next lesson is the exit strategy, and when I first heard or it was explained to me, I labeled it wrongly, I labeled it that you can only use this strategy if you’re going to sell your business in the future. But at the time when I was first introduced to the exit strategy, the thought of ever selling my business, it never even entered my mind. So I pretty much completely ignored it. 10 years down the track in the late ’90s when the Internet started gaining traction, I decided that I no longer wanted to have a business where I had to drive to the office. I simply wanted to work from home. So I started to start preparing the business so I could sell it.
To sell a business
That’s when I first realized I should’ve listened to my accountant more closely 10 years prior. Now here’s the lesson, to sell a business, you can normally sell it for one to four times it’s yearly profit, and in fact some businesses sell for well over four times the yearly profit. But you know, when you go to sell a business, the buyer wants to see that the person who’s selling the business is not a vital part of the business. In other words, the business must run without the owner being there.
A big game-changer lesson
Now, this was a big game-changer lesson for me. Once I’ve got that business to run completely without me, it was a lot more fun. It produced an income, and because it ran without me, it gave me more time. Suddenly I had my days free, I could get out of bed at whatever time I wanted, and I didn’t even need to have an alarm clock anymore, and I could do basically whatever I wanted to do during the week. You know, I could go to the shops or the beach or fishing or whatever in business hours when there were less people. And the other amazing part was the business grew even faster as I was in effect leveraging my time.
Automate an online business
Now, back in those days over 20 years ago, it was much, much harder to automate a business than it is to automate an online business today. Now today with online businesses, latest software, local services start from $1 an hour, it’s never been easier to automate an online business.
The big lesson is build your business with an exit strategy
So the big lesson is build your business with an exit strategy from day one, no matter whether you’re going to sell the business or not. Build your business so it runs at least 95% without you. That’s all for this week. Wherever you’re watching this, please scroll down, leave me a comment below. Until next week, list more, sell more, this is Neil Waterhouse.
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Top 10 lessons from being in business for 30 years – Lesson 4