Start your business, grow it and sell it.
You can loose big money running a business.
The risk inherent to a limited company is limited to your own investment. Therefore the risk is limited and I definitely encourage any would-be entrepreneur to go for it and start his own business.
Don't go for loans secured on your house or anything like that because it would mean that your business which is risky by nature could make you homeless.
How can you end up broke while running a limited company?
The trouble is that as you grow your business, you invest in areas of your business that make sense to you at the time but later on realize that the money could have been used more wisely.
That's when you start picking money in your savings account to inject more money in your business knowing that this time, the money you invest will give a real break to your business.
The most successful business people have failed nine times (at least).
This is all part of the learning curve. You are paying to learn the ropes.
And when you think you know all about your business, you realize that there is still one part of your company that needs improvement to make the all system work. So there you go again, re-injecting money again in the business with that idea in mind:
I can't give up right now, that's not me.
What goes on in the head of the businessman when times get tough?
I have built 90% of the business so far. It's not working yet as planned but I feel that if I just add a little bit of this and that, then it will really work perfectly...
... Plus, it would be a shame to stop now when so much has been done and when there is so little left to achieve.
I have personally been going for many years with this type of mindset. And everytime, I was right, every piece of the business added to the sytems already in place have made the business work better and better. Until the day I found out that I was working in the wrong industry.
My conclusion: You can do everything right, but in the end you won't be happy if you are building a business in an industry that's barely making money. You will be lucky to survive and you may realize that it is almost impossible to grow your business to a satisfying level of income while keeping the financial risks low and the customers happy and returning.
When is the right time to give up on a business idea?
That all depends on you. I would say: Stop when you have done everything you could.
Sometimes, it is best to stop running the business you have built. Keep the best part of it if it can be used in your next venture. Don't be ashamed to stop and loose what you have invested as it is the normal - standard - learning curve of those who succeed in life. Face it: While doing all those mistakes, you have become a different person, a
knowledgeable business person who has learnt important lessons.
It's not only about the money.
Who you have become through challenges, success and failure is what you take with you to the next venture, it's what makes you more likely to
be successful.
The richest people on earth have sold their business (or at least a part of it).
You may think:
Hold on, Bill Gates, Steve Ballmer, Larry Page still own their business.
Nope, that's not correct. They have taken their business public. That means they have sold part of their shares in the business to the streets. It's done through an
Initial Public Offering (IPO) which is the first step to get a company floating on the stock market.
So basically these rich guys have sold their business to anyone willing to buy a part of it (stock holders).
The millionaires living next door:
There's also a huge number of people, less famous, who have built their business to a more moderate level and sold it to private investors. The business didn't go public but it went from the founder's hands to the new owner.
Such operations can amount to millions of dollars without any newspapers mentioning it!! That's simply because this type of sales happen about everyday.
Let's do the maths:
A business which
EBITDA (earnings before interest, taxes, depreciation and amortization of assets) amounts to USD 100 000 per year can sell for about five times this number.
How to become a millionaire?
Read again the maths just above.
If you can build your business to a stable level of earnings above two hundred thousand dollars per year, you can become a millionaire.
This statement assumes that the
business does NOT rely on you, your skills or your business connections to keep this level of earnings.
You can make a million dollar if you are the sole owner of the shares of that business. If you own 50% of it, you still make half a million dollars which is not bad if you have built the business in only a few years.
If you can sell, talk and smile then you can get into business, the game of the Rich.
Failing to plan your business is planning to fail. Most people actually have a plan to start their business (and eventually grow it).
The trouble is most of us tend to over estimate our ability to sell. That's what makes most business plans doomed for failure.
If you are working on starting your business, learn to sell. Read the article below and most of all:
Practice selling.
The best advice I could give to anyone about to start a business is: Don't. Instead,
get a job as a salesman.
Selling on a daily basis is the best way to learn how to sell.
You may want to save yourself the hassle of learning to sell. You are wrong.
Even if you plan not to sell your business products yourself, you need to realize that recruiting a salesperson means
selling the job.
Selling skills will definitely help you secure key accounts and also negotiate your supplier's fees. So don't think that you can do business without knowing how to sell.
Here is a quick guide to selling. Read this, enjoy the article and then go dig more.
Selling is key to running a business. Read:
Make the sales process quicker
Learn more about starting a business or submit a website about getting into business. Go to:
The Money Websites Directory: Section Business
