Let’s face it: most people go into business to make money and lots of it.
I wouldn’t go so far to say that all small business owners dream of the day they can flog their shop and retire on a beach with a pina colada. But most business owners do have some sort of exit strategy in their heads, even when they’re just starting out.
Many dream of building up a business and selling it to a larger company or even a competitor. Although this will probably deliver a fat cheque and remove the stress from your life, it won’t give you ongoing revenue or expose you to the upside of a business you might have put years into.
Mike O’Hagan, chairman of national removalist firm MiniMovers, which specialises in small, local moves, has taken a different approach. He has purposely avoided selling out and has instead retained full control of his business without having to work in it.
Mike started Mini Movers with a ute and $200 and it now generates $30 million a year in revenue.
“I started the business 24 years ago because I wanted not to work, and to earn lots of money and choose how I spend my time. I saw a fundamental need in the market for a company to offer a small moving service and I found a way to address that need, but I’ve never moved a stick of furniture. From day one I’ve worked on the business not in it. I had a clear vision of one day being able to turn up at the AGM, collect my dividend cheque and leave,” explains Mike.
Although he may not have physically lifted boxes, Mike has worked in every other part of the business.
“I started with sales, then systematised the process and got someone else to do it for me. I went to work on to the operational side of the business and did the same thing. Then I did the same thing with marketing and management. The idea is to let the business outgrow your own skills and then hire great people to replace you who know more than you do,” he says.
According to Mike “once the business got to a certain size I found people to put into a board to manage the business and make sure the CEO stays on track. Initially I put technical experts on the board but that didn’t work; you need people with business experience. What I’ve done in a nutshell is extracted myself from the business by corporatising it. It is hard to let go – but I have someone on the board who can referee when discussions between me and the CEO get a little heated.”
It’s a fascinating approach: instead of selling out to a large firm Mike has managed to continue to grow his business and retain 100 percent control of it, giving him a fabulous income and the freedom to do pretty much whatever he likes.
Mike’s now commuting to university in the US to study business and spends his time mentoring young business people. It’s not exactly pina coladas on the beach, but it’s Mike’s equivalent.