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WEB/DIGITAL Lesson Learned

Discussion in 'Business Models, Niches, Industries' started by AroundTheWorld, Jul 24, 2007.

  1. AroundTheWorld
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    AroundTheWorld Be in the Moment Speedway Pass

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    I recently sold a service oriented business. These are some of the lessons I learned about both owning and selling this type of business.

    LESSON #1 If you turn an S business into a B business, put some sort of accountability system in place to monitor employees.

    I had been doing all the work myself for a few years when I decided to hire an employee and free up my own time for other things. Great idea, but not practical. I was niave.

    I hired employee that was also a friend. She worked out WONDERFULLY for about a year. She was awesome. Motivated, friendly to customers, organized. Her circumstances changed and I had to hire someone new. Hired another friend. (part of the problem... hiring friends! lol)

    She was great.... for a bit. Then things started to slide. She wanted raises, though she was working less. She stopped answering the phone consistantly. She started to feel entitled. Spending $ without getting authorization first.

    I was totally hands off. It had been working that way for me for a long time, but suddenly my profitability went way down. I stepped back in to figure out what was going on. Lesson learned... never go as hands off as I did with an employee... even if you think they are trustworthy. There needs to be a checks and balances system in place first.

    She ended up leaving - and I was stuck with a business that I did not enjoy and had not worked "hands on" for several years.

    Decided to sell.

    Called a competitor. He decided to buy immediately. It was a blessing for a few reasons. First and foremost it freed up my time.

    But, the hidden benefit is that I got a little peak into how he did things in our industry - and boy were they different.

    Why?

    LESSON 2: Never stop focusing on sales!!

    I got so bogged down in customer service that I lost sight of the money machine... sales.

    All my secretary wages were going toward customer service - activities that were costing me money in the form of wages but were bringing in NOTHING!!! We went the extra mile for our clients, believing that that made us the best company. That may be so - and I do believe that my company did offer the very best customer service... but what did that get me? Certainly not more profit!!

    I lost focus on what was important. Sales, Sales, Sales.

    LESSON 3: Know what you've got!!! While business had declined, and I had personally outgrown my taste for it, my business was valuable. I didn't understand how much. I actually ended up getting 3 times more then I thought I would.... but looking back, I believe I could have gotten more.

    But, I'm not complaining.... overall, it's been an amazing - and educational experience.
     
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  2. emorgan
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    emorgan Contributor

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    Wow girl!

    Was this your LLC biz? Thank you for sharing, because I think those are the most important keys for most any service business and will help anyone who reads this!

    Your dealings with people makes me think about the 48 Laws of Power. Your friends can be your worst enemies (entitlement, betrayal, access, etc) and your enemies can actually become allies. Great book- always mazing to see it play out in life, you know?

    Whats next for you?
     
  3. kimberland
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    kimberland Bronze Contributor

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    One of the most important things I do during new business development
    is setting up the "system"
    so it can be handed off.

    That sounds simple.
    Just document, right?
    But no, because I can't assume that the person taking over the project
    has the same ethics, desires, or experience.
    I tend to assume that they have NONE of these qualities
    (anything then is a plus).

    : )
     
  4. AroundTheWorld
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    AroundTheWorld Be in the Moment Speedway Pass

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    Yup - this was my LLC biz. After 7 years, it was strange to turn it all over to someone else... I hadn't realized how much my identity was wrapped up in being an "business owner." But, it was a very good move for me to sell. I'm pleased for a few reasons...

    1) It just didn't fit in with my personal philosophy anymore... it wasn't fulfilling to me.

    2) It is a sinking ship. One day law changes will squeeze the industry out anyway, so I'm glad to have stepped out when there was still some value. I don't like repairing sinking ships.

    What's next? Not sure! We've got some RE deals in the works... expanding a self storage and starting a 2nd facility. Those 2 project will occupy my time for the next few weeks.

    But, I still feel the need for a business. I've got the seeds of an idea for a new one, so I'm mulling that around. I'd like to partner on this one with an internet guru type.
     
    Last edited: Jul 26, 2007
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  5. AroundTheWorld
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    AroundTheWorld Be in the Moment Speedway Pass

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    Exactly! When I first decided to hire someone and step out of the world of do-it-all-yourself, I read e-myth... (great book, btw) and I set up a system.

    But, I put too much trust into my "friends" believing that they would care about the success of the business and that they would maintain a level of professionalism.

    I failed to put checks and balances into that system.
     
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  6. MJ DeMarco
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    MJ DeMarco Raving Lunatic Staff Member Read Millionaire Fastlane I've Read UNSCRIPTED FASTLANE INSIDER Speedway Pass LEGENDARY CONTRIBUTOR Summit Attendee

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    I cannot confirm enough of what ATW is saying; the struggles in selling my business are always tied to that perception that "I am the business" even though 98% of it is hands-off and automated.

    Getting a system in place and ensuring the the SYSTEM is the business and NOT YOU is so critical in selling a business easier. The business should be the systematized engine -- human resources / business owners the oil.
     
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  7. kimberland
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    kimberland Bronze Contributor

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    I had that issue when I left corporate.
    I didn't realize how much of my self perception
    was wrapped up in my career.
    I couldn't call myself an entrepreneur
    'cause nothing was off the ground yet
    (and I just had a failure under my belt).
    I couldn't call myself a writer
    'cause all I had were rejection slips.
    Tough place to be.

    : )
     
  8. Russ H
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    Russ H Gold Contributor Read Millionaire Fastlane Speedway Pass

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    Hey 'K-

    You don't have to be published to call yourself a writer.

    You just have to write.

    You don't have to sell any paintings to be a painter.

    Or the best example: You don't have to be on film, TV or in a play to be an actor!

    (some of my most memorable meals have been served by wactors and wactresses)

    Emily Dickinson considered herself a poet.

    "While she wrote, at the last count, 1,789 poems, only a handful of them were published during her lifetime. All of these were published anonymously and some may have been published without her knowledge."

    'nuf said.

    -Russ H.
     
  9. royemunson
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    royemunson Contributor Read Millionaire Fastlane

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    I agree with Russ. I call myself an entrepreneur b/c that is what I am in my heart. Even though I have not crossed over yet or have a biz that is up and running full steam, doesn't mean I am not trying to get to that.

    I have seen that my thought process has been different from teh time I was young than my counterparts who always thought job!!
     

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