Prepare Now to Cash Out Later
Get serious about creating the value you want to get out of your business in the end.
By: Chia-Li Chien | Published 05/25/2010
This is the last of three excerpts from Show Me the Money by Chia-Li Chien.
In a recent Oprah Winfrey show (Sept. 2009), Oprah interviewed the most powerful couple in the world, Aishwarya Rai and Abhishek Bachchan from India. They are the highest-paid and wealthiest couple in Bollywood. Their viewership capability surpasses any American actor, even ones like Tom Cruise. On the same show, Oprah introduced the "Chinese Oprah," Chen Lu Yu. She has a viewership of 140 million a day vs. "our" Oprah's 40 million viewers a week. In the last segment of this particular show, Oprah interviewed the most famous polo player in the world, Nacho Figueras, who also happens to be a Ralph Lauren model and the father of two.
During this particular show, I couldn't help but note that all these famous people around the world are bilingual (at least). Oprah interviewed them in English, and they all spoke it beautifully. Each of them also had a command of his or her native language, used for daily business and everyday communication.
Aishwarya Rai and Abhishek Bachchan both make a minimum of four films a year, whereas top-billed American actors might make only one film every year or two. Chen Lu Yu tapes two shows a day, whereas Oprah tapes only 16 to 20 shows a season. Some might say these famous foreign personalities work much harder than their American counterparts.
In my opinion and through my professional observations, it seems the world is slowly being taken over by India, China, South America and other centers of productivity. We are somehow falling behind. Why? Well, for one reason, we don't have the population that could aggregate the kind of buying power we see in more heavily populated countries. Although they may show a lower GDP (gross domestic product) per person compared to the U.S. as a whole, they certainly produce more and have more purchasing power than the U.S.
It appears to me, as well, that education in India and China is far better than that in the U.S. because of the deep cultural belief that "something won't just happen overnight." They are slowly but surely catching up to Americans.
So, what are you going to do about it?
Know Where You're Going
Carrie, a good friend of mine, started her business when she was 24 years old. By the age of 27, she had more than $4 million in annual revenue, four offices in the U.S. and Canada, and two licensed or franchised offices. She has decided she wants to get out of her business by age 30--only three years away.
Carrie's business provides one-year business development action plans and a team to actually do the work for business owners. And it looks like she's going global. She was just interviewed by a Chinese journal, and perhaps her business will soon have an office in China.
Carrie did a lot of things right. She not only worked hard--she worked smart. Carrie followed the steps and applied the theories and practices listed below:
- Pull marketing --Carrie created important relationships with her market makers--Fortune 500 companies. Not just one but eight of these companies agreed to sponsor a national tour for Carrie. She was booked as a presenter, getting paid to speak to and teach an average of 100 businesses per event. She now serves as the marketing arm for the same eight market makers. Best of all, she created her own market; her firm is now a market maker for her clients. Many of her clients currently buy and sell services within her network.
- Maximize intellectual property--Carrie created the processes used by her company--not just paper processes, but also an actual online version, used internally, as well as by her clients. She slowly secured her intellectual capital via automated systems. In addition to that, she licensed the system to her franchise offices.
- Put together a professional management team--Carrie put in place a professional management team that she knows, trusts and can depend on to help her take her business where she wants and expects it to go.
- Predictable profits--Carrie has multiple sources of revenue, including a full-service monthly subscription plan with a fee of $2,500, a one-year action plan project fee of $3,000 or an online self-administered one-year action plan for a fee of $100 per month for subscribers. Yet with all these sources, she has in place a set of metrics that she checks weekly with her team, postulating predictable profits. So, even though Carrie is on the road a great deal of the time, she knows which services are the most profitable, and her team focuses on those accordingly.
She knows she's got a full plate, and she knows when she wants to get out. She wants out by age 30, and she realizes that is only three years away. Oh, and I forgot to add, Carrie wants to create another business after she gets out of her current one.
You can't get any better than that.
There are so few people like Carrie that you could probably count them on one hand. Some people just seem to have a "golden touch." However, when it comes to value creation, with the right processes and the right team in your business, you can have some of that gold, too. Our team, for example, has a process that can lead you toward value creation. The only piece remaining is for you to start believing you deserve to cash out and becoming serious about really creating the value you want to get out of your business.
You are at a point when it's time to make a decision. And there are only three choices:
1. Best choice
2. Bad choice
3. Worst choice
Did you ever hear the saying "The only bad decision is no decision?" Making a bad choice is still better than a worst choice--doing nothing. Remember why you started your business in the first place. Was it the flexibility it afforded you or were you simply passionate about what you wanted to do? Or did you just crave financial independence? So why not keep that process moving forward and make the best choice by doing what is right for you? You deserve to turn your business into meaningful personal wealth. Like an investment, you should expect your invested principal back plus interest on the amount of risk you've taken over the years.
My aim in writing this book has been to simply change your business mind-set in how you plan and move forward through the years as a business owner. You most assuredly didn't stop planning when you started the business. You went on to grow it and nurture it, working to get what you wanted out of it each day you unlocked the doors.
So why would you stop there? Doesn't it seem reasonable to keep moving forward and prepare for the day you are ready to lock the doors? It's not a negative thing--it's a good thing. The day you step out and have the time and money you need for your next journey is the next big thing for you. Make it happen.
Read the previous excerpts: "Buy Low, Sell High" and "Which Exit Strategy is Right for You?"
Chia-Li Chien, CFP®, CRPC, PMP; helps women entrepreneurs to convert their business into meaningful personal wealth. She is the author of Show Me The Money and columnist for WomenEntrepreneur.com & Fox Business online. She is available for consulting, speaking engagements and workshops. She can be reached at www.chialichien.com or firstname.lastname@example.org.
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