Build a profitable business- the baby steps part 37

Never, ever sell. As you have probably figured out by now we are long-term about everything we do. We believe you should try to build long-term relationships with everybody. Your customers, your business partners, your suppliers and your business network. We believe you should be long-term in most business decisions that you make. As we have stated before, never ever sacrifice long-term benefits for short-term profits. The short-term profits will come and go, but strategic business improvements that add to the long-term balance sheet of a business lasts a lifetime.

Another big aspect of being long-term is related to the business ownership. Our advice on this issue is simple. Never sell. Ever. Be in it for the long haul. Look upon your business as a constant, a part of your life that is always going to be around. Never ever, let go of any ownership. In fact always try to increase your ownership into the businesses that you fancy. We always try to trade away other things against ownership. Why? Because the big money is in the ownership. The control is in the ownership. Everything is in the ownership.

While we do agree that the primary goal of doing business is to make money (many people make the mistake of assuming you are in business to be busy) we are not overly concerned as to when that money is to be paid. We are fine if we don´t get paid straight away if we believe there is a good chance of getting paid a lot more in the future. We will gladly pull ourselves out of a thousand small battles if we believe that those decisions will ultimately win us the whole war. We look for strategic improvements. The operational and tactical aspects are important as well, but it is the strategic improvements that keeps a business moving forward. And as long as a business is moving forward and continually evolving its value is rising. And it is that increase in value that we are after. Nothing more. And nothing less.

We have at times engaged in business activities where key memebers of our team discussed potential ownership with us. We always tried to pay them instead. We paid them progressively in many cases, i e they got paid more the better they did. But we wanted to hang onto the ownership of the company. Our instinct has always been very strong about this particular issue. What is really surprising is how many people are quite content with gettting paid instead of getting a stake in the company. In fact whenever we have discussed the choice between ownership of some sort or a generous salary, 99 percent of all individuals would go for the salary. We find that very difficult to understand. For instance, if we hired a brilliant progarmmer and he built a software for us he would typically be more than happy to get paid instead of claiming a stake in the enterprise. He would accept a 100 percent certain small payment today, instead of a possible large payment in the future. We are just the opposite. Why would we want the money today if we stand a chance to make a killing tomorrow? We don´t understand that line of thought whatsoever. Then again, as most entrepreneurs, we find ourselves on the wrong side of conventional wisdom more often than not. We do not work for salary. But we are willing to work for ownership. There is a big difference. An individual that has salary has limited upside and even more limited time. He is working hard, but more often than not, somebody else is collecting the better part of the fruits of his labour. An individual that has ownership, on the other hand, is in pole position. He gets to call the shots. He gets to play the game with an ace up his sleeve, and he can make up the rules of the card game as it goes along. An individual that has the ownership might not get the small amounts of money right now, but in most cases he or she will get most of the big money later.

There are exceptions to the rule. There are always exceptions to all rules. If we were to be offered a windfall profit, that is a profit which we considered to be a lot more than the theoretical value of one of our holdings we would consider selling. It happens. Sometimes these kind of not-so-rational bigtime offers actually make some sense for the company making the offer. It might be a strategic aquisition or the enterprise you are in control of could be worth a lot more once it got in the hands of a bigger company. The reasons are many why a theoretical overprice might sometime be a sensible bet even for the company making the offer. And if that is the case it becomes a win-win situation. The bidding company gets a strategically important part of their puzzle firmly in place. And the seller gets a boat full of money.

A windfall profit. That´s the exception to the rule. Only if somebody would offer us a windfall profit would we consider selling. We have been approached with those kind of offers over the years. Some of them we took. But many of them we turned down. Those that we turned down had one thing in commmon. They all stated that we had to stay on as “working partners” in the company for so-and-so many years. To us that sounds an awful lot like a slave contract. An extremely lucrative slave contract, but a slave contract nevertheless. That was what made us turn these offers down eventually. The money was good. In some cases the money was a game-changer, enough to last us a life-time. And still we would turn it down. Why? Because we just couldn´t stand the thought of becoming employees again.

We can promise you this: when you have tasted the sweet feeling of freedom and liberty you will not go back voluntarily. As soon as we tried our wings as entrepreneurs we quickly realized that wild horses couldn´t drag us back to corporate life again. Why be a part of a toothless fleet when you can be a vicious pirate? Why have a boss when you can be (your own) boss? Why make somebody else rich, when you could be making yourself rich? We don´t get it. And besides, we are probably way to cynical to be able to stand 5 minutes of the corporate bull shit flying around in the corporate world. We don´t do corporate bullshit. We tell it like it is. No false pretenses. No excuses. No apologies. That´s just the way it has to be. Anything else would make us go insane.

That´s about it. We never look for the quick exit but if you are truly working for the long term you will sometimes be offered an unexpected short-term windfall profit. Sometimes it is prudent to take that offer. But we would only do that if we got to walk away as free men. But that´s just us. Everybody needs to follow their own hearts and minds. We will gladly forsake short-term money, salaries and dividends as long as we can have ownership. An ownership in a continually evolving business has unlimited upside. It is a golden ticket to real wealth. Why would you want to give that ticket away for some paultry pocket change?