“One most forgotten open secret is that investors invest in the business owner first and foremost, only then look at the business potential. The business owners need to demonstrate they know the business, its financial indicators, the market, their money making model etc. And, most importantly, the attitude of the business owner.” -Zack Amin-
I believe there are two ways to build a business; build to last or build to sell. Building a business to last doesn’t mean you will not sell it. You are open to when the price, time and circumstance is right.
One of my dad’s best advice to me when I started in business is to not be sentimental about your business. If you can build one, you can always build another. Look at it as growing the economy by giving a chance for someone to enter into business through you. I find this to be sound advice.
He also says that when we build a business, build it to last. Reading this two advice, how do you make sense of this somewhat contradictory advice. Well, actually they are not contradictory but actually complementary.
As Zack Amin said in his statement about investors, the important thing is the attitude of the entrepreneur. If my attitude is about building something to last, the chances of me building a solid business foundation based on genuine personal value is high. This can only make the business sound. I as the entrepreneur put all his heart and soul into a venture that he knows will reflect who he is for posterity. I will be serious in building the good faith of my company knowing my track record is attached to everything the business is involved in. My DNA is in it. I create something genuinely unique because it has a SOUL; my soul.
If I was building it to sell, my end goal is an exit. That is why there are business strategy that requires you to have an exit plan. This is dangerous because it will create a situation where the means will justify the end and this I find a slippery slope you will most likely fall from. I will then build the business with an intention to exit. This is where you hear of horror stories of investors being stuck with over valued, looks good businesses because the strategy is to have a series of investment buys you out bit by bit so that eventually you are out of the business. The focus is in exiting fast. What will then you do to make this end? Build reputation; which takes time or build perception; which takes no time. This is the danger. Yes, I am making a sweeping statement because not all businesses are like that. However, to highlight the severity of the few that might, I am generalising.
If I know that what I am building is not to last, why would I put my heart and soul into it. I find the marriage analogy to be true to being in business. How do you expect a marriage to be healthy if you know by being married is to be divorced?
I hear some of you might be saying right now that marriage and business are two different things. You can’t equate those two together. I am afraid I am too much of a believer of the tenet “how I do one thing is how I do everything”. To me my attitude is mine. It can’t be split, left at home for some things and be compromised for other things. This to me is a dangerous way to live life where I will be inn a position to be able to justify unsavoury things in life. I do not want to be in that kind of life. So since I choose to being the same me in all I do, therefore to me how I am in marriage is how I am in business.
This is where believe that having an attitude of building to last is a better strategy that building to sell because in the event of you have an opportunity to sell, the business is solid and reputable.