I have spent many years in the IT industry and watched many businesses struggle when it is time to sell. I have also seen great technicians be promised a stake in the business, which never eventuates. This lead me to look around at other industries to see if they had solved this problem. The obvious professional service industries that came to mind were some really old ones, Legal and Accounting. These industries have many lessons for the realtively young IT industry.
By comparson the IT industry started in 1960 when IBM created the first transistor computer, and the first computer the ENIAC was invented by J. Presper Eckert and John Mauchly at the University of Pennsylvania and began construction in 1943 and was not completed until 1946. It occupied about 1,800 square feet and used about 18,000 vacuum tubes, weighing almost 50 tons.
So as you can see the IT industry is a not even a baby by comparison.
This is by no means a standardised ways of doing things, in every industry you have people who seek out more infoamrtoin, answers to questions and pursuit of being better.
noticed that it is really hard to
Building a business doing what you love
So you started and built a great business that supported you and your family while you did what you enjoyed.
That is a fantastic achievement, however now you are reaching retirement age and are thinking about the next stage of your life.
Wouldn’t it be great if these thoughts had come around sooner rather than being too busy working in the business to give it a thought.
All too often I have seen many business owners, create something they thought had value when in reality all they were doing was keeping themselves busy and making a living.
Retirement is looming
I wrote this to hopefully plant a seed in the minds of business owners young and old. The seed of opportunity, the seed of hope. That if they act now they may well be able to design a better tomorrow a better retirement.
One in which they can demand a high valuation for what they have built, one in which the handover will be a smooth and painless transition orchestrated over years instead of weeks, one with no business broker fees.
This builds value in the IT Industry, builds value in your business and your team.
To attract and retain the best people you need to demonstrate that you have a vision and goals for the business, if the only goal is to provide the owner with a wage until he retires then one wonder all the good people leave as this retirement looms. If you are lucky you may have one or two stalworts that hang around hoping to pick up the pieces if the boss can’t find anyone to buy the business, or the owner owns the building and wants to give the business away so they can secure a tenant for the rental income.
Problem: Business sale prices are a joke, buyers want to pay much less – disparity in value
So now how to get out and make some good money?
Solution: Groom business owners
So what is the solution, how can you
What if you have a really hungry future business owner that cant wait. Why not give them a division with his remuneration tied to the profit of that division. Yes, that means it can go down too.