When I first discovered entrepreneurship, I was a blind optimist and believed that most entrepreneurs were succeeding, earning big money, enjoying freedom and making an impact.
I knew there was work involved, but I couldn’t understand why people wouldn’t choose to be an entrepreneur – success was a sure thing if you were ambitious, tenacious and focused on adding value.
Over the following 15 years, I interviewed thousands of entrepreneurs and discovered that on the whole they were actually hurting. Most were optimists when they started out – good, smart, hard-working and dedicated – but their businesses were failing to provide real benefits. This game was beating them.
I realised most entrepreneurs weren’t building anything of value. Even worse they weren’t having much fun along the way. They worked slavishly, made huge sacrifices, struggled, planned and strived hard, but in the end their efforts didn’t pay off.
Contrasting Fortunes of Business Owners
Statistically, you’ll work harder and earn less in your own business than you would working in a corporate job. The very reasons people start businesses – to earn more, work less and have a bigger impact – are actually less likely to occur in your own company.
Fortunately, I’ve also had the chance to get close with a number of highly successful entrepreneurs who are living the dream. I’ve flown on private jets with them, visited their palatial homes, spent time in their businesses and relaxed with them on extended holiday breaks.
It was this contrast that lead me to spot the key differences between those that that succeed and those that struggle.
Assets that are Critical to Success
The difference is assets. Struggling entrepreneurs focus on hustle, hard work, being creative, meeting more people, generating new leads and making an extra sale.
Successful entrepreneurs focus on building their business into something that has “stand alone value”. No matter where they are in the world, the business can continue to run, make sales and generate happy customers with or without them.
We often hear about the entrepreneur who sold their company for a life-changing sum of money, but rarely do we get the breakdown of the assets the business had in order to achieve such a lofty valuation.
When you go and talk to several people who have exited their company, there are remarkable similarities in what they have built. Their business assets fit within seven main categories.
There are seven assets a business needs to have in place before it will stand on its own feet:
1. Intellectual Property
Every business owner has valuable knowledge about their industry. You must get this out of your head and into documents. Case studies, stories, scripts, diagrams, algorithms and methodologies are all examples of potentially valuable IP.
Your business should show up consistently and powerfully so that people can get to know, like and trust it. A key document is the “Brand Guidelines” which outline the philosophy, identity and strategy for communicating your brand.
When your business has a strong position, plenty of data and established channels the marketing becomes easy. Winning awards, collecting more information about your clients and formalising affiliate relationships fit into this category.
4. Products and Services
Every business has products or services but how many have documents like brochures, web pages and specifications sheets for all of their offerings. Businesses that take on a life of their own have every aspect of their products spelt out in documents.
Businesses like McDonald’s and Starbucks are famous for their systems manuals which are so well-created that a teenager, who can’t keep their room tidy, can run a million-dollar business. Every single aspect of the business has a checklist and a training manual.
Additionally, technology systems can be used to automate dozens of processes and free up the people to do the work that really matters.
No matter how many systems or technology gadgets you put in place, a thriving business will need to attract and retain good people. This means you need to treat your culture like an asset – craft it and document it.
Businesses that are valuable and fun have their finances in order and can access funding if they need it. You can’t escape it, if you want your business to stand alone, you will need your financial house in order.
Work ‘On’ Your Business Not ‘In’ It
The successful entrepreneurs prioritise, above other business activities, time to work ON their businesses not IN it. They set aside time to talk with suppliers, work on creating documents or acquiring the tools they need. Their goal is to create assets in their business that do the work, not to do the work themselves.
A useful idea is to treat anything that causes stress, a bottleneck or a poor result as an “asset deficiency”. Rather than trying to work harder and fix things with your ongoing effort, aim to discover what document, system, software or resource would solve the problem once and for all.
When you have a business full of little assets, it adds up to your business becoming a big asset; ultimately one that can function without you being there.
Traditional assets have “stand alone value”. Your home won’t change in value if you walk out on it. Shares in Facebook won’t change in value if you take a holiday. Assets such as art, wine and metals retain value – it isn’t linked to what you’re doing.
This approach isn’t only for people who want to sell their company. For most entrepreneurs, their goal is not to walk away or take endless holidays but instead to keep improving and growing the business in a way that’s fun, flexible and financially rewarding. To achieve this, you can’t keep getting sucked into the same issues day-in, day-out.
Creating new assets in the seven categories will elevate you and your team to new heights and piece-by-piece the business will take on a life of its own, becoming ever more enjoyable and valuable year after year.
About the author
This guide has been exclusively written for ByteStart by Daniel Priestley, finalist in 2018 The Business Book Awards for his book, 24 Assets: Create a digital, scalable, valuable and fun business that will thrive in a fast-changing world, published by Rethink Press.
More on growing your business
ByteStart is packed with help and tips on all aspects of starting and growing your own business. Check out some of our most popular guides;
Going for growth
- 5 Steps to kick-starting growth in your business
- How finding a great mentor could help you to grow, and your business to flourish
- The ABC of Growing a Business
Funding your business
- What to do when the bank says “NO”
- 6 Things you need to know before launching a crowdfunding campaign for your business
- How to maximise your chances of securing a small business loan
Leading a business
- How to be a leader rather than a manager
- Why the best leaders do less
- The Founder’s dilemma – Managing the transformation from start-up to growth business