Opening a small business is exciting. It’s about finding your niche in the market, creating a product or service that makes you stand out, and finding your strengths as an entrepreneur. It can be overwhelming when it comes to planning, paperwork, patents, and budgets, but with the right support, the moment you finally open the doors (or online stores, as has become increasingly more common) is a satisfying rush. The subsequent first few months of finding your sea legs, making sure that your business is able to survive in the current market, is yet another adventure, if also the cause of a few sleepless nights.
Eventually, however, you have to do more than just tread water. You have to ensure that your business is ready for the future, and maybe even ready to outlive your management. You’ll want to retire eventually and pass the business on to someone else. How can you be confident that your business will last the year, much less the coming decades?
Plan to Protect Your Business With Intellectual Property Assets
Regardless of whether your business is a service company or sells products, intellectual property protections can greatly increase the value of your business and multiply the eventual value of your business. Establishing multiple brands that are each protected by federal trademark registrations provides you valuable assets that can dramatically increase the value of your business. Over time, protected branding can be worth hundreds of thousands of dollars. Protecting your products with design patents and utility patents can significantly increase the value of your business by preventing others from copying your products.
Your small business started with a vision. Your preparations for the future will have to start the same way. Every business’s version of growth is different, and it can be hard to know the direction in which you want your business to grow before you start. Take time to visualize where you’d like your business to be in 5 years, 10 years, 30 or 40 years. In what ways can you diversify, and in what ways should you stick to the original spirit of the business? You’ve been through the process of patenting your intellectual property already as well as the other operations of setting up a business. Will you need to create a new product, or tackle the process of opening more stores? What about partnerships with other businesses and organizations?
Your plan should be flexible, since after all, you don’t know what the future will hold. But the sooner you start a tentative plan or vision for your business, the better.
Visualizing is one thing. Next you need to be able to put that plan in motion. Set targets to measure your pace moving towards your future goals, using the SMART method:
- Specific. Be concrete in your objectives. How many sales or what kind of profit figures do you need to make in the next quarter in order to work towards your goals? Set a specific number within a specific amount of time.
- Measurable. This often goes hand-in-hand with “specific.” Don’t set abstract or far off targets. You need to be able to clearly chart your progress from the beginning of a period of time until the deadline for that target.
- Achievable. Focus on what you can do now, more than what you want to happen. It’s always easier to set targets measuring output than measuring outcome.
- Realistic. You might want to have three new storefronts open by the end of the year, but is that realistic for what your small business is right now? As your business grows, what’s realistic might expand, but you have to start with where you are now.
- Timely. Deadlines are key here. In order to prepare for the future, you need to get moving now, so make sure you set timeframes that are reasonable but not too far distant.
Be Willing to Step Back
It’s hard to imagine letting go of your small business. In many ways, this is like your baby. This is a pursuit that you’ve poured blood, sweat, and tears into. You’re passionate about it. However, if you want to retire one day and have your business continue for the next generation, you’re going to have to learn how to loosen your grip on the reins so that one day you can let go. For some small business owners, that’s sooner than anticipated. They may find that the best way to enable their business to grow is by turning it over to shareholders or a board of directors. This can be a tough decision and shouldn’t be made lightly. If that is the best course, consider qualified people you’d trust most with your business and embrace the next chapter.
Plan Future Ownership
If you don’t plan to turn your business over to shareholders, who do you plan to take over your business when you retire? Do you want to keep it in the family, perhaps passing it on to the next generation? Maybe you’ve taken an employee under your wing and you’d like to train them to one day take over when you retire? Maybe you want to sell your business and use the funds for your retirement (though you should still have at least somewhat of a retirement fund before you do so). Like your vision for your business’s future, this could change overtime, but come up with a tentative plan sooner rather than later.
Consider the Value
If you plan to sell your business, you have to consider the value of your business. One mistake many small business owners make is overestimating the market value of their business. They bank their retirement on what they think they’ll make from the sale of their business and find themselves pinching pennies when they mean to relax as a result. Appraising the value of your business will require real research into the market as well as a potential consultation with a professional. Make sure to take into account all your business assets and investments. Keep in mind you can also sell patents to a particular product.
You may find, in preparing for your business’s future, that you need assistance with patent, trademark, or copyright law, among other business legal services. If that’s the case, contact Garcia-Zamor today for expert intellectual property legal services.