Secrets of a Serial Entrepreneur: A Business Dragon's Guide to Success

218 Pages·2010·1.86 MB·English

by  Shaf Rasul

Secrets of a Serial Entrepreneur

Secrets

of a Serial

Entrepreneur

A Business Dragon’s
Guide to Success
SHAF RASUL
This edition first published 2010
© 2010 Shaf Rasul
Registered offi ce
Capstone Publishing Ltd. (A Wiley Company), The Atrium, Southern Gate,
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CONTENTS
Introduction 1
1 Are You an Entrepreneur? 13
2 EXIT – It’s in Large Letters and Lit Up for a Reason 37
3 Buy the Right Businesses 47
4 Invest in People, Not in Products 71
5 Start Your Own Business 91
6 Ten Key Things to Know About Business Finance 113
7 Make a Business Profi table Fast 139
8 Drive a Hard Bargain 157
9 Sell Businesses for a Profi t 177
Appendix 203
Index 206

INTRODUCTION
Being an entrepreneur means being in the risk business.
You will make some mistakes, and pay for them, but in
the end you are your own person and the successes you
achieve make up for the difficulties you’ve met and overcome
on the way.
Show me an entrepreneur who tells you they have never got it
wrong and I’ll show you someone who has started to believe
their own propaganda. Making mistakes and learning from
them is an unavoidable part of the life of someone who is trying
to make a lot of money out of setting up or buying and selling
companies.
Here are two quick examples to illustrate my point.
I was once involved in a company that sold exhibition space to
suppliers of products in the IT industry. It was doing well but very
quickly went downhill when I made a simple mistake. I decided
that expansion and growth would be best achieved by increas-
ing the volume of people coming to the exhibitions. I thought
that reducing the price of entry might help and took that strat-
egy to its logical conclusion – we stopped asking people to pay
anything at all to gain entry. The idea was that it would bring a
2 SECRETS OF A SERIAL ENTREPRENEUR
lot more people into the exhibition hall. This, in turn, would
bring more business to our customers, the exhibition stand hold-
ers, and we in turn could charge more for the stand space. What
actually happened was that the numbers through the front door
went up all right – up to ten times (particularly on a Sunday) but
the people coming in were less interested in buying IT products.
Some of them were simply coming in out of the rain and out of
curiosity. That might not sound so bad but the genuine custom-
ers were fed up with pushing their way through the crowds and
the exhibitors said that the extra people were wasting their time
and, of course, stealing stock! It was a classic case of the laws of
diminishing returns – and unexpected consequences.
What did I learn from that? That it’s not just customer footfall
that makes a business successful, it’s attracting the people most
likely to buy. Salespeople call it ‘qualifying the prospects’ and it’s
a topic I will return to later.
It was probably a reasonable risk to take, but it sure didn’t come
off. But it wasn’t a catastrophe; we could recover the goodwill of
our customers and get back to business as it was before. So, a
mistake and one I could learn from but not terminal.
Contrast this with another entrepreneur who made a mistake.
He and his business partners were young men who knew a par-
ticular market very well. They were party people and they knew
what attracted young people of their age into pubs and clubs.
They decided to use that information to set up the sort of pub
that they themselves liked to go to – loud music and low
lighting.
So, they opened the doors of their new enterprise with a trium-
phant flourish and the party animals of the town came fl ooding
in. Within a few weeks they had a packed venue and the cash