Post from David Russick, Gopher Angels
As an entrepreneur, you never really separate your business and personal lives. So, it's important that your business and personal goals are aligned. Throughout my 20 years as an entrepreneur, I've learned how to focus on what really matters to me - what I want out of my business, and what I desire in my personal life.
What do you want from your business? Is it to build a legacy enterprise to pass on to your family? Is it to be your own boss and earn a decent living? Or, is it to build value and cash out quickly (hopefully!)? Answering these questions early on will help you focus on a business strategy that suits your personal goals.
I recently met an entrepreneur who is on his second start-up after selling a previous business. His new venture is experiencing 15-20% growth, and he is looking for investors to fund an aggressive expansion plan. I questioned why he wanted outside investment when he could self-finance steady growth from current operations without giving up equity. That's when I learned that his vision is to build the company for IPO or acquisition. He wants to cash out quickly. Knowing that keeps him focused on relevant strategies, instead of getting distracted by inappropriate opportunities.
I've had 2 very different experiences with my own start-ups, both of which I found rewarding. I started my first business, TUBS, Inc., 20 years ago. My personal goals were to control my own employment, be a successful business owner and provide a good living for my family. My vision was to expand to several US cities. I also knew I that I wanted to maintain 100% control and ownership. So, I grew TUBS organically in 3 major US markets. I met my goals of employment and ownership, and I looked forward to coming to work every day. This vision drove every decision I made (and every mortgage I took on our house!).
My second start-up, Bagster Dumpster In A Bag, was a completely different deal. What I wanted this time was to challenge myself to a new level, and to achieve a successful exit within 5 years. This business opportunity aligned with my goals, although I knew it would be risky and challenging. This time, part of the strategy was to enlist equity partners to support our aggressive expansion into 15 major metro areas, with the goal of a quick exit. I was prepared for the personal changes that come with a sizable capital infusion, and I knew this strategy would get us to our goal. I also knew that in the majority of equity financed businesses, the founder is replaced as head of that business.
There have been plenty of opportunities to veer off strategy, but I've always considered my business and personal goals to help keep me on track. So, try to align your goals - being an entrepreneur means risk, opportunity and reward. If you understand what you want out of your business early on, you'll have an easier time following the opportunities that will bring you to the rewards that are meaningful.