Transferable value. Is this important to you?
Did you know only 4% of all US businesses do a million dollars in top line revenue? Going one step further, did you know only 0.4% of all US business do over ten million in top line revenue?
What does this have to do with transferable businesses? I have found at these levels of sales you have moved from owning a job to owning a business.
The difference between a job and a business is that a business is perpetual. It goes on with or without you. You can take a vacation and still get paid. The business, even though you set the overall direction, is not reliant on your income generating capabilities.
On the other hand a job is completely dependant on you. Jim Carlye wrote about the value of a transferable businesses by saying the value is, “what a business is worth to someone else without the original ownership.”
The question to ask ourselves as business owners is not, “how well do I run my business?” Instead the question we should be asking, “how well does my business run without me?”
I have a list of 11 requirements to take on a business client.
Here are 4 of the 11 items:
1) Business owner takes a minimum of 2 weeks vacation every year.
2) Business doesn’t have over 25% of overall revenue tied up with 1 client.
3) Business has 3 or more vendors to purchase their product from.
4) Business has a stable and motivated management team.
Here is a challenge to all us who call ourselves entrepreneurs, investors, creators and yes – business owners. Take 4 weeks vacation. Can you be away from the business for that long and when you return the business is still rolling along.
Congratulations – you are one step closer to having a transferable business.
~Hank Bockus, owner Bockus Consulting.
“Keep selling. Get sold”