Some days you wish to just go back to the 9-to-5
Do you ever look back at the job you left? Steady paycheck, benefits somebody else paid for, and the ability to go home at five and not think about work until Monday. Some weeks you almost wish you'd never started this business thing.
Maybe you took a pay cut to do it. The money that should have been your raise went into another truck, a hire, or a new piece of equipment. Let's say you could make $100k at the old job and only pay yourself $75k now. That's $25k a year you feel in the checking account and in daily life, combined with the added stress of running a business.
What you don't have a number for is what all that reinvesting is building. Nobody mails you a statement telling you what the business is worth, or what your blood, sweat, and tears are doing to the value of the company.
Here's what it can actually look like. Ten years go by and you're doing a million in revenue at a fifteen percent profit margin, so $150k in net profit after paying yourself. You've got guys who can run a job without you overseeing every step, and customers who call because the work is good, not because they know you. A business like that sells, and $600k is a realistic and conservative figure.
Spread that back over the ten years you were taking less and it's another $60k a year on top of the $75k you paid yourself. So $135k a year compared to the $100k 9-to-5. Thirty-five percent more, for the same ten years of work.
The whole difference is whether what you built can actually be sold.
You don't have to be planning to sell for this to matter
Life can take unexpected turns. A move to another area, an injury, a shift in vision. Any of those can be the reason you want out someday. If every relationship and every decision runs through you, there's nothing to transfer, just work that stops. Your crew doesn't know what to do without you, and your business can't afford to replace you. You just worked ten years for less money and more stress.
What to start doing now
Put your compensation on the books as a real number. Not sporadic draws when the cash is there, but roughly what it'd cost to hire somebody to do your job. Once your pay is a real expense, you find out whether the business makes money or just pays you.
Get your personal stuff out of the company. Separate card, separate account, and a straight split on the things that genuinely go both ways, like the truck. Every mixed-up expense is a dollar a buyer has to trust you on, and he won't.
Build the name around the work instead of around you. If customers ask for you by name then you're the product, and the product leaves the day you sell. Let quotes go out from the company, and get your guys holding the standard on jobs you never see.
Keep in mind
None of this happens in the ninety days before you'd
want out. A buyer wants two or three years worth of clean books to look at, and a crew doesn't learn to run a job without you in a quarter. Start now while nothing is forcing you to.
The business that sells is the same business that runs smoothly. It's also the business where you can take a week off without things falling apart.
You gave up a lot for this. Make sure you're getting something for it besides a job you can't quit. Build it so somebody else could buy it.
Prosynergy Bookkeeping works with trades and small businesses across the US. If you want a straight answer on what your books would show a buyer right now, we're glad to look.
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