What Path Are You On?
Understanding which path your business is on is the key to making it successful.
Path One - The Bridge Is Out
The SBA statistics report that 50% of the small businesses that start today will no longer be operating 5 years from now. When your business ends up of this path it is called being on the "Bridge Is Out" path. This path often leads to the loss of personal savings, assets, credit, and personal relationships. Business owners get so focused on surviving that they do not look at the bigger picture of their own success.
Path Two - Path To Nowhere
This path is where 90% of those businesses who survive end up. They are surviving but not thriving. Their businesses are nothing more than a long hour low paying job. It is said that they are not "Business Owners", but rather their businesses "Own Them". These businesses typically end up creating less than $75,000 a year in Owner's Discretionary Cash Flow and have values of $200,000 or less if a buyer can even be found. Because of their long hour low paying nature they are not very attractive to potential buyers.
Path Three - The Success Path
Knowledgeable Business Brokers will tell you that the hardest thing for them to find are "Sellers with qualified businesses". This a business that has been optimized for all 12 Key Success Elements and that is generating a $100,000 or more in Owner's Discretionary Cash Flow. They say "buyers are like lint, they are everywhere. Qualified Sellers is what is hard to find". This means if you take the time to get your business on the Success Path and keep it there, its value will continue to grow and it will be very attractive to many buyers when you elect to exit.
You would not buy a house to flip for $200,000 and then work on it for 60 hours a week for 5 years only to sell it for $200,000 would you? Well that is exactly what most small business owners do. Find out where your business stands right now and then start optimizing it for all 12 Key Success Elements.