World No.1 LinkedIn & Personal Branding Expert – CEO & Founder of Black Marketing – 1,000+ LinkedIn Recommendations, 4 Best Selling Books.
I create companies like other people buy property: to build and sell. In fact, I find that I have zero attraction to investing in property but love creating and selling companies. There are definitely upsides such as profit if you get it right, but there are also plenty more downsides if you get it wrong. But hey, that’s life as an entrepreneur, and I wouldn’t have it any other way.
Here are three approaches that can help you become a profitable entrepreneur:
How do you get funded without giving away shares?
There are multiple ways to get funded without giving away any shares. I founded my first company on the redundancy that I had engineered from the last company that I had worked for full time. That gave me a three-month runway to get off and running. I funded Black Marketing by selling my flat in London and pouring the money into it.
Another method I have used includes getting clients before you start your business who will agree to pay you when you do start or even before if possible. That way you not only have a guaranteed revenue stream when you start but also clients without which a business can’t survive.
If you believe in your idea, you will find ways to fund it without having to give away shares.
How do you decide your pricing strategy?
Your pricing strategy determines your marketing and your profitability. If you’re well-funded, you may not care about profit. Canva was recently funded again and now has a valuation of several billion dollars yet has never made a profit like companies such as WeWork and Bumble. For years, Amazon was the same. If only all entrepreneurs could be so lucky.
We mere small-time entrepreneurs have bills to pay and can’t usually afford to do this, and therefore, our pricing strategy has to match our ambitions. For me, that has always been a profitable company.
All of my five marketing companies have been service-based and profitable with a premium pricing strategy. You can’t make money in a service business by giving away your expertise cheaply. However, this strategy limits your market. I could have a value-based pricing policy and have 10x the number of clients I have now but have 100x the headaches and 1,000x less profit.
I would rather focus on the premium end of the market and look to enhance our proposition and service. It’s definitely tougher, but it’s also more enjoyable and allows me to focus on quality, not quantity.
How do you decide when it’s a good time to sell?
I have exited four of my five businesses, and each time, it was the right time to sell. There are many reasons to sell. Each of my four was based on the potential to scale quickly as part of a larger company or to realize value from the brand that I had built. My buyers were all based on my network and personal connections. In my opinion, networking is the best way to sell a business.
You must have a plan if it works out and a plan if it doesn’t. Probably about 9/10 won’t succeed. It’s often hard going from being your own boss and setting your own agenda to being part of something else or leaving a company altogether for a payout. It’s harder for us mavericks than others.
Like with everything an entrepreneur does, it’s all based on optimism and opportunity. But just like supporting a football team all your life does not guarantee success, neither does being an optimistic entrepreneur. However, it certainly helps!
“Better to have tried and failed than never to have tried at all,” is one of my favorite sayings, and it sums up selling your company to a group of companies trying to scale and integrate at the same time. Sometimes it works, but more often than not, you take the money and start something else.
Entrepreneurs are their own boss for a reason. Most founders get displaced when they start growing by a new board or VCs because they are not suited to run a large company, only to create and start it. This is why most founders move on after selling or scaling.
I certainly can never see myself working for someone else again. I love to create value and profit by creating a business and selling it, and you can’t do that working for someone else.
Forbes Business Council is the foremost growth and networking organization for business owners and leaders. Do I qualify?
World No.1 LinkedIn & Personal Branding Expert – CEO & Founder of Black Marketing – 1,000+ LinkedIn Recommendations, 4 Best Selling Books. Read Chris J “Mohawk” Reed’s