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My Business Is My Pension – Part Two

In part one of this article I outlined my belief that ‘my business is my pension’ is typically a myth and the reality may be somewhat different to the dream. You then undertook a quick exercise to understand an approximate value of your business based on average net profit over the previous three years multiplied…

My Business Is My PensionIn part one of this article I outlined my belief that ‘my business is my pension’ is typically a myth and the reality may be somewhat different to the dream.

You then undertook a quick exercise to understand an approximate value of your business based on average net profit over the previous three years multiplied by a factor of five. Depending on your industry, this may be considered the norm in valuing a business, but there’s also the possibility that completely different criteria are applied.

Knowing the approximate value of your business today is only the starting point. You now understand there is a gap between where you are today and the finish line when you will sell your business and possibly retire. Your role as business owner is to strategically plan and drive your business towards the end goal over the years remaining.

It is safe to assume that your business will take many twists and turns in the future, either forced by regulation, competition or advances in technology. Of course, the internet has also made business global in some industries which means greater competition from abroad where costs may be considerably lower.

You’re probably recognizing the gravity of all that you have and what is in store for you, steering this ship through both calm and stormy seas that lie ahead. There are tools to help you and no doubt you are aware of these. One of the biggest pieces of advice I give to entrepreneurs is to systemize your business. Think of it as a prototype. By systemizing all aspects of your business, you create a blueprint for the future. This will no doubt evolve over time but it allows you more freedom to develop and possibly expand.

Systemisation means you have created your manual for consistency in service, recruitment, sales and marketing, and asset management. It also means that there is a strong ability to establish other offices in different locations. By repeating what you already know works, you should find over time that you can replicate your success. This is how franchises work. Yes, some are good and some perform rather poorly, however, this is due to the quality of the recruitment process and the skills, passion and drive the franchisees bring to the business.

Previously, you reverse engineered your key numbers to understand what must be done now to drive your business towards its goals. Did you find this useful? Were there any shocks, revelations, aha moments? I hope so. I hope this exercise gave you a clear path forward and that you now recognize that good planning broken down into clear objectives with suitable deadlines is essential. I call it my GOSTE system.

G – Goals

O – Objectives

S – Strategy

T – Tactics

E – Execution

Goals – these are the big goals you should set every year for each part of your business

Objectives – usually confused with goals and it’s because objectives can be mini-goals. Let’s take golf as an example. The goal is to score the lowest number of shots in a round. The objective relates to the score you wish to achieve on each hole.

Strategy – continuing this golf example, strategy is how you intend to play the game based on the conditions on the day.

Tactics – each hole has to be played differently due to the length from tee to the green and the numerous obstacles and traps waiting to punish a poor shot.

Execution – this is the skills and resources required to meet all of the above. Poor skills will mean that the goal is unrealistic. Poor equipment will also hinder success and may lead to a number of bad scores along the way.

This is why strong management, great systems, quality resources (where appropriate,) good people and high degree of skills are essential to the success of a business. It’s been said that “a business is only as strong as its weakest link.”

  • I wonder what your weakest link is and what you are doing about it?
  • Is it holding you back?

For many it is access to finance. For others, recruiting is a serious issue. Whatever the reason, it is important that your time is spent resolving it so that both time, and money are not wasted in this area in the future.

The Most Important Asset You Own…

Before closing this article, there is one area of your business I wish to single out for more attention – your database. Often, this is the hidden golden nugget in a business and yet business owners rarely see why. If your database is current and you are consistently keeping in touch providing good advice, recommendations, pieces of relevant and interesting information, then you have a database that has tremendous value and potential.

To a good marketer, a database can be the source of huge profits. If you know what to do, you can easily multiply your existing profits because you have created a loyal customer. These people are more inclined to buy off your recommendation, take action when requested and continue opening your messages because they see that you are taking care of them.

I recommend you re-read the last two paragraphs because this is describing a very special relationship that should exist between you and your customer. If it doesn’t, then there’s something wrong. This should become one of your biggest goals of the year, to fix this so that you do create a database with real value.

Remember, many businesses are sold with an element of goodwill built within the sale price. The stronger your database, the higher value placed on the goodwill of your business. A database with five thousand names is valueless if it has been neglected. However, if it is an alive, current, vibrant database then it will be worth a fortune. Big businesses are more likely to be interested in buying your business just to get their hands on your database.


I said earlier that managing your business resources is so important. By creating a “this is how we do it here” systemized business, you are planting the seeds for greatness and ability for continued growth and expansion. A business that can literally be picked up and planted in another location has value, especially when there are strong systems to replicate success.

If you are serious about using your business as a pension scheme then I hope these articles have provided you with food for thought and more important, ACTION.

Good luck in your planning!

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