We recently had an interesting chat with a retired small business owner; for 25 years, he owned and operated a dump truck business. He told me that ten years ago, he had an opportunity to increase triple the revenues; the construction industry was booming, and builders were pounding on his door for contract work. He subsequently grew the business from under $ 100,000 to $ 1.5 million dollars.
So, banks and leasing companies were calling all day to offer great deals on anything and everything. The problem? He did not want to alter his business and lose control. He was the sole owner and had no family members who were interested in helping him or who eventually wanted to take over the business; he stayed stagnant, the revenues started falling; and by the time he retired, revenues were around $ 150,000 a year while he gradually sold in piece meal all business equipment.
Today, as he sits on his balcony overlooking his acreage, he has two regrets, surprisingly not money-related!
He wished he had grown the business to its true potential;
He should have introduced his kids to the business at a younger age and prepared them to take over.
There was clear value lost in the whole chain – business revenues, employment creation, the opportunity to create generational wealth, and above all the business which was wealth $ 1 million at its peak has been run into the ground to $ 0.
It is essential to test your business valuation and maybe consider the exit options (outright sell/deemed sell the business) while you are at the pick of your business growth.
As an individual or SME owner, it is time you change your habits, and get familiar with your business facts and metrics from a data perspective (stop compiling your finances for the sole purpose of taxation); this is the only way you can unlock and fully reach the potential of your business.
It is time to move away from Cash Driven Decision Making to Data-Driven Decision Making.
Rukbe aims to bridge the Data Analytics and Financial Literacy gap by demystifying the business valuation, financial data compilation, and understanding of financial information and empowering users to confidently communicate with their financial advisors, wealth coaches and bankers.
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