Turn Your Practice Into a Business
Over 98% of Canadian businesses have fewer than ten employees. If you are the owner of one of these businesses, this article is for you, because when it comes time to transition or sell your business, your choices may be limited.
Andrew Rogerson, a US-based business broker and author, points out that only 1 in 5.5 of you will find a buyer for your business in ‘normal’ times. But the next five years will notbe normal. There is a tsunami of baby boomer business owners transitioning their companies. This means your statistical chances of selling your business falls to one in ten or worse. You are more likely to be one of the lucky ones if your business is on a growth trend, consistently profitable, and not dependent upon you to be there every day.
In his book Cash Flow Quadrant, Robert Kiyosaki explains that there are only four ways to make money.
- Business Owner
He is of the opinion that you can’t become wealthy as an employee or through self-employment. (Although many current CEOs of private, public and governmental corporations are disproving that!) Kiyosaki argues that you become wealthy when you leverage the revenue producing value of other workers in a business. One eye-opening statement he made was, “If you are an employee or self-employed, the more successful you become, the harder you have to work.”
That was a big “A-ha!” I see the wisdom of that assertion, and have certainly proven it myself over the years.
I got another ‘A-ha’ when I heard a speaker at a CEO seminar say, “If your business cannot run without you, you are an employee, not a business owner.” Few businesses with less than 10 employees can manage for more than a couple weeks without the owner being there to make things happen.
So, for small business owners, there are a couple of key messages:
- If you know how to recruit, select, hire and retain good employees whose work can be monetized, you are more likely to grow a business that will bring wealth to you and your family while you are running it.
- If you can grow that business and make it less and less dependent upon you and your presence to be successful, you are more likely to find a buyer for the business when it’s time to sell.
Grow a business not a practice. Get good people. Get out of the way.
December 2, 2013
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