Why would a successful business owner turn all their attention to a new line of business, or even jump to an entirely new business, when there is still much to be done in the existing business?
Because they can.

It’s what entrepreneurs do.

Not every small business owner is an entrepreneur.
It’s a pretty simple test, really: when you think of “improving your business”, are you thinking about
(A) how to make it run better, or
(B) how to open up new revenue opportunities?

If your answer is (A), you’re not an entrepreneur. Businesses need good managers to survive and thrive. But they won’t scale. There’s nothing wrong with that. Just understand that much of the stuff you read online about how to run a business is not for you, and will in fact drive you into a ditch if it isn’t the way you roll. The good news for you is that your business is very likely to be sellable when the time comes.

Not such good news is that if it is just gliding along with inflation, it won’t be worth much more in 5, 10, 15 years than it is today. You can do just as well investing your equity in savings bonds, and without the hassle of marketing, staffing, customers, or landlords. But it does give you something to do every day. (Whether you can sell it at the end or not is a different matter: 87 percent of owners cannot sell.)

Or of course, you can choose to grow its profits and make it more valuable.

If you’re a maintainer thinking about how to expand the business value, take a lok at our page for owners

If your answer was (B), you have the entrepreneurial spirit. You’re motivated by “build new”, “grow” and action verbs like that. If you have unlimited wealth, you can do that fairly easily, but otherwise you have to get the capital for the new venture out of your existing business, and that is where the problems begin.

To sell it, or to leverage its profits as collateral for a loan, you’ll need a steady stream of profits that is considerably larger than the loan payments, AND the business has to be ready in many other way for a new owner to take it over. To take advantage of this great opportunity, whatever it is, that transfer has to happen in short order. Anything that is unacceptably weak — profits, processes, customer concentration, staff turnover, and much more — will take months or years to root in deep enough to show up on the financial reports. So your business (and you) must be prepared now, today, in case that opportunity comes along.

Are you anywhere near ready? Do you know where “ready” is? Try this quick assessment on our site.

Not all exits take place for such cheerful reasons. More posts coming on those dismal topics because you don’t choose them — they choose you. You have to be prepared.