KLE 111: Do You Have A Real Business?
Let’s say that you have chosen ‘business’ as your Growth Vehicle (KLE68) and finally find (or start) the business that you are looking for.
Suddenly, you will come across lots of people who are clearly excited when they tell you that they are “also in business” … except that, unlike you, they aren’t!
Mostly, they’re just working 60 to 80 hours a week – on little to no pay – for the toughest boss of all: themselves.
Why do I say they are probably not in a ‘real’ business, yet you are (or, soon will be)? And, how do you tell the difference between a ‘real business’ and a glorified job?
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Let me give you a couple of real-life examples which should help to explain:
Peter Hastings, who already owns the antiques store right next door, opens a sandwich shop at 2264 North Lincoln Avenue. A quaint sandwich shop that he decorates with many of the items from his antique store. The shop thrives and provides Peter with a nice income for the next 20 years, when he sells it. Peter, with his two little businesses, has carved out a nice niche for himself. He was careful with his money, both before and after ‘retirement’, so – after 20+ years of hard but fulfilling work – he can finally afford to take it a little easier.
Bryant Keil buys a sandwich shop; it’s uniquely (and, quaintly) decorated, it’s in a nice location, had one owner who is selling in order to wind down a little after ‘working’ the business for 20 years. Bryant buys the little shop and develops a franchise model around it. Within 10 years, Bryant has “over 200 stores, in Illinois, Indiana, Michigan, Minnesota, Ohio, Texas, Maryland, Virginia, Pennsylvania, New Jersey, Washington, D.C., Kentucky, and Wisconsin.” Bryant is now a billionaire.
Bryant had a business, one that worked whether he was there or not. Peter had a nice job; but his business needed him almost every day until he retired … that’s the nature of a typical small business.
Unlike Peter, you now have a real barometer to tell you whether a business opportunity is worth pursuing: you HAVE to be able to sell it for at least your Number (less any investments that you have made along the way, not including your house) by your Date. If not, what are you doing wasting your time with the $7 Million 7 Year Wealth System?!?
What does this mean?
Simply that you need to take an estimate of what profit your business can produce in the year (i.e. Your Date) that you need to sell it to produce Your Number, and multiply that profit (better yet, average the previous 2 to 3 year’s profits) by what you think you can get if you sold the business.
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So, if you own a little sandwich shop – or, the online equivalent (here’s how you spell it: B-L-O-G) – don’t bother me with the details … it’s nice that you’re keeping yourself busy, but I’ll get bored listening to your story.
But, if you’re working on the next Potbelly Sandwich Works – or, the online equivalent (F-A-C-E-B-O-O-K) – drop me a line and don’t spare the gory details … I’m listening to every single word you say!
