Right now, it can be hard to imagine buying or selling a business. But there has never been a better time to turn your business into an asset—an asset that works for you. Start by asking yourself: If someone offered you the opportunity to buy your business, would you want to buy it?
The first thing you would do is evaluate if it’s a good investment. You’d check if the business can run without consuming all your time, meaning a strong team is in place. You’d ensure it’s profitable, with positive cash flow. It would be worth even more if the business model relied on recurring revenue from scalable solutions instead of services. You’d also confirm whether the business is a leader in a clearly defined market. A business like this is one you would love to own!
Unfortunately, for many entrepreneurs, that’s not how their business runs now.
Imagine wanting to sell your business, but no one wants to buy it. Or getting an offer that’s not enough to justify the years (decades?) you poured into it. The worst-case scenario is being desperate to exit but owning a business that’s not sellable. A business like that is a liability because you’re trapped.
This almost happened to me. After 15 years of building my technical consulting company, I was exhausted. I was ready for an exit—and that’s putting it mildly. I was ready for an escape! But I found out the hard way that no one was interested in buying my services company. Why? Most services companies are highly dependent on people, making them difficult to manage and scale. And most entrepreneurs own services businesses.
One of the biggest issues with professional services firms is the time spent understanding the client’s business, solving their problems, and meeting their needs. While this generates revenue, it doesn’t build an asset. Instead, imagine developing standardized solutions to solve primary problems for a specific type of client—your precise target market. These solutions become your company’s intellectual property, which you market and teach to the client.
Rather than having each client explain their business to you, find a niche you understand deeply and show them how your solution solves their problems. Your team trains the client instead of the client training you. This approach builds an asset rather than just generating revenue.
I’ve seen entrepreneurs perform contortionist acts to “serve” their clients, often to the detriment of their business. They don’t want the client to leave because they think they “need” them. They even take on clients and projects that aren’t a good fit just because they have the capacity and think they need the work. Again, this generates revenue but doesn’t build an asset. Instead, use that capacity to invest in your company. Build solutions you market like products.
Here’s the secret: make your business so valuable you would want to buy it.
The first thing to understand is that if your business can’t run without you, any buyer will want you to keep working for the company after the sale. Chances are, you’re exhausted, and that’s the last thing you want to do. But buyers won’t pay top dollar for a company when it’s obvious the owner is burned out. They’ll question why they should buy it at all since it took the life out of you. No one wants to take over your problem child. If you lack a solid system or management team, buyers will see it as a risk.
All the reasons that make your company hard to sell also make it hard to own. Ask yourself if you would buy your business. If the answer is no, start changing that right now. From this point forward, every decision you make should be based on increasing your company’s value so much that you would buy it.
Feeling trapped is just a story. The solution is to change your mindset. Stop seeing your business as a burden and start treating it like an asset. Think of your business as something valuable, feel good about the value it creates, and take action to manage it for growth. Otherwise, you’ll remain stuck in a lifestyle business, which is really just a “job.” No one wants to buy a job, and you shouldn’t want to own one either.
To regain the sense of freedom you had when you started, make your company work for you.
I decided to turn my business into an asset by focusing on solutions that would scale. And there has never been a better time for you to do the same. When your business is an asset that runs without you, leads in a niche market, is profitable, and generates recurring revenue, it works for you. When that happens, you might not even want to sell it. Either way, you win.