If your business was for sale, would you buy it?
Asking yourself that question, definitely makes you analyze the state and health of your business. But most importantly it forces you to understand your “why”. Knowing your why determines all the decisions you make while running your business. And ultimately it dictates if you have a sellable business or one worth investing in.
An Entrepreneur’s Story
In my entrepreneurial journey I’ve owned two types of businesses. A brick and mortar gym and an e-commerce handmade sticker shop. Both of these endeavors were labors of love. I worked tireless hours on all aspects of the businesses having been a one-person show and my livelihood depending on their success.
While I was in the midst of building my businesses and watching my hard work pay off, I likely would have said “heck yea” I’d buy my businesses if they were for sale. I would’ve rattled off things like passion, flexibility, and freedom as the reasons they were worth my time and money. But after about 5 years operating, my answer changed.
If I were an investor, would I have bought my gym? Hell no. While it was very profitable for one person, I hadn’t built it for scalability. Therefore it wasn’t a viable, sellable business worth purchasing. That was done intentionally as I was very committed to my mission which would’ve likely been destroyed by an investor focused solely on the bottom line.
When I finally shut the doors to my gym in 2018, I was ready to be done and had lost the fire to continue. Thankfully, I had run a lean business and was able to close with enough profit to live without working for a few years. This made all the blood, sweat and tears worth it. That said, had I wanted to exit as a millionaire, I would’ve done a lot of things differently in order to sell the business.
If I were an investor, would I purchase my e-commerce business? Nope. Again this business is a one person show (well my husband and I). It provides us with flexibility and freedom, and at one point was our sole income. But it’s also not scalable nor profitable enough to be worth investing in.
Is It Worth It?
So is this a bad thing – to say I wouldn’t purchase either of my businesses if they were for sale? Not at all. Because I intentionally ran these businesses the way I did. I was able to build them the way I wanted, make sacrifices for my mission and bow out when it was time.
See the thing with starting and running a business it needs to be worth it to YOU. That means at minimum you are able to pay yourself a livable wage and ideally a wage higher than you’d get working in your industry. Otherwise honestly it’s not worth the sacrifices. Yes you will have the satisfaction of doing what you love, but truthfully nothing can killl a passion faster than owning a business. I absolutely loved what I did running my businesses, but had they not paid me beyond a liveable wage and also fueled my dream at the time I wouldn’t have pursued either.
This question – “would I purchase my business?” – makes you think about what as a business owner you need to do to make your business something worth spending your own money on.
Below are additional questions to ponder as you explore your why and goals as a business owner. If you want to build a sellable business, the answers to these questions needs to be YES.
- Is your business profitable?
- Can your business run without you?
- Do you have a growing customer base?
- Do you have raving, happy, return customers?
- Are you innovating in your industry?
- Are you creating jobs?
- Is your business scalable?
- Do you have systems in place to help you work ON your business?
- Does your business run like a well-oiled machine?