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Do You Have A Business or a Job?

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Do You Have A Business or a Job?

By , June 20, 2019

When you are deciding to exit your business, an important part of the process is establishing what you have to sell — do you have a business, or are you self-employed?

The E-Myth

Michael Gerber, in his best selling book, The E-Myth, described the common scenario he had seen so many times in small businesses.  He witnessed business owners who have started or bought a business and have simply bought themselves a job. They may have bought a database or a few customer contracts (common in trades such as plumbing, mechanics), but the income is essentially derived from the business owner directly servicing clients. Robert Kiyosaki’s definition of a job is ‘Just Over Broke’ because there’s no equity value. The day you stop working, the money stops.

The ability to run the business without YOU being involved is a critical step in adding value.  Often a business owner is involved in every aspect of the business, causing the growth bottleneck.

 

What’s the Value?

This type of business has little or no resale value, unless you can find a way to replace yourself in the business with at least the same results. A good way to determine whether or not you have ‘a business’ is to consider how long you could be removed from it without affecting operations. If you could take weeks off and the business would continue to survive and produce income, you have a business. If you’ve got a position where you have to be there all the time, you’ve got a job. The income stops when you stop.

It is important at this point to identify whether you have a ‘job’ so that you can spend time in your succession planning building a business or making the most of what you have. An Succession Plus adviser will help determine the best path for you.

 

 

Christine Nicholson

Christine Nicholson

Partner

Christine is a Chartered Management Accountant with a Law degree who brings 25 years of wisdom, know-how, and experience of working with SME’s. Her long and varied career has included working overseas, rescuing technology companies, building a healthcare business from scratch and running a zoo.

She started her first successful multi-million turnover business in 2002 and has grown business ventures for others including a bankruptcy to 8-figure exit in 18 months. Christine’s engagement consistently gets her clients increasing their turnover with improved profitability and fewer working hours.

She has saved clients thousands and increased the value of their businesses by millions. Since 2008 she has generated over £100m of crystallised value in business exits.

Christine is also an author of 3 books on Finance, Business Management and Technology businesses. She is a seasoned speaker and Professionally Accredited Member of the Association of Business Mentors.