A few years ago, I was working with a new business mentor and one of the first questions he asked me was about the ultimate outcome I wanted of my business. When I began sharing with him my business vision and goals, he stopped me. While vision and goals are important to operating a successful business, what he meant by “ultimate outcome” was to get me to think about what I’m expecting my business to do for me.
He went on to explain that there are generally two ultimate outcomes entrepreneurs/business owners should have of their business. Either 1) at some point sell the business for a profit or 2) maintain the business that offers the owner a comfortable lifestyle.
The ultimate outcome of your business is a critically important factor to determine because you’ll structure your business differently depending on your answer.
If you believe the ultimate outcome is to sell your business at some point in the future, you’ll want to focus on aspects of your business that will appeal to a potential buyer to maximize your business’ value. Profit margins will be among the most important factors, so you will want to consider this in relation to how you pay yourself with the understanding that greater profit is potential at the time of sale. You’ll want to build a sound business with a clear plan for growth along with complete business systems that is easily communicable, even for someone outside of the industry. You’ll also want to be continually thinking about how to make the business easily transferable; the business can’t be strongly tied to you as the owner from a branding perspective, but rather tied to a system or methodology so anyone can simply continue the business without major interruption.
If your ultimate outcome is to create a business you envision growing for the duration of your career or through retirement, you can focus on maximizing your personal income rather than showing greater profit margins as you would if you wanted to sell. You can build and evolve the business as it suits you and the business, and to adjust for your needs and your goals to attain the lifestyle you want your business to provide you.
When you decide to start your business – or at any time in your business if you haven’t done so yet - be sure you reflect on what you want your business to do for you. More than goals and a vision, starting with the end in mind will give you clearer definition on how you will structure your business to achieve your ultimate outcome.