15 of the Best Books for Bootstrapping Entrepreneurs

15 of the Best Books for Bootstrapping Entrepreneurs

We came up with this list of 15 of the best books for bootstrapping entrepreneurs by asking our own team of founders for their personal favorites. These are the titles that came up over and over because they’re like playbooks for running your business better. From classics to new releases (and even a little inspiration outside of the business section) we’ve got something for every entrepreneur’s reading list. Eyes blurry from staring at your screen? Relax, we have links to the audiobook versions, too.

The Best Business Books for Bootstrapping Entrepreneurs

Best books for entrepreneurs - The Lean Startup by Eric Ries

The Lean Startup by Eric Ries

A book dedicated to helping you avoid the pitfalls that lead most startups to fail, this one’s packed full of advice to help you do more with less, adjust faster, and figure out what your customers really want.

Amazon | Audible

Best books for entrepreneurs - Rework by Jason Fried

Rework by Jason Fried and David Heinemeier Hansson

One of the best book for entrepreneurs going solo, you’ll find tons of counterintuitive advice for going into business on your own without outside investors, getting more exposure without spending a small fortune, and being more productive. Fellow business author, Seth Godin says in his review, “This book is short, fast, sharp and ready to make a difference.” Founder of HelpTeaching.com, Lilia Tovbin is also a fan.

Amazon | Audible

Best books for entrepreneurs - Presence: Bringing Your Boldest Self to Your Biggest Challenges by Amy Cuddy

Presence: Bringing Your Boldest Self to Your Biggest Challenges by Amy Cuddy

If you’ve ever left an important pitch or sales call feeling like your performance was less than stellar, this book needs to be on your radar. In June 2012, social psychologist and author Amy Cuddy gave one of the most popular TED talks of all time. Her insights into how body language might impact not only how others see us, but also how we see ourselves has been viewed and shared more than 50 million times. In her book, Presence, she expands on this idea with passion, research, and real-life examples.

Amazon | Audible

Best books for entrepreneurs - Lost and Founder by Rand Fishkin

Lost and Founder by Rand Fishkin

Fishkin’s 2018 memoir reads like a conversation with a good friend over a couple beers. While he could easily talk up his many business successes, instead he takes you on an honest, funny, and overarchingly human ride through all the ups and downs that are life as a startup founder.

Amazon | Audible

Best books for entrepreneurs - The Four Steps to the Epiphany by Steve Blank

The Four Steps to the Epiphany by Steve Blank

A new classic with practical advice on everything from rapid iteration and customer feedback to testing your assumptions.

Amazon | (not available as audio)

Mack McConnell - Founder of Taster's Club, part of the SureSwift Capital Portfolio“A grandiose title for a very good book!”
Mack McConnell, Founder of Taster’s Club

Best books for entrepreneurs - The Art of the Start by Guy Kawasaki

The Art of the Start by Guy Kawasaki

If business is more art than science, then Kawasaki is one of the masters. Updated in 2015, this easy-to-follow guide will lead you through everything from innovating, recruiting, fundraising, branding, and social media.

Amazon | Audible

Best books for entrepreneurs - INSPIRED: How to Create Tech Products Customers Love by Marty Cagan

INSPIRED: How to Create Tech Products Customers Love by Marty Cagan

One of the best books for entrepreneurs new to product management, Cagan’s straightforward, master-class like volume is a must-read to help you develop your product management cycle, scale and staff your team, and uncover new features your customers will love (and pay for).

Amazon | Audible

Best books for entrepreneurs - Tools of the Titans by Tim Ferriss

Tools of the Titans by Tim Ferriss

It’s hard to think of an impressive business list that Tim Ferriss hasn’t topped since the success of The 4-Hour Work Week launched him to worldwide fame. He’s one of Fast Company‘s “Most Innovative Business People,” one of Forbes‘s “Names You Need to Know,” and one of Fortune‘s “40 under 40.” Oh yeah, and he’s been an early-stage investor/advisor in companies like Uber, Facebook, Shopify, Duolingo, Alibaba, and more than 50 others. It’s the understatement of the year to say he knows the startup world, and safe to say if he’s got a book out, it should be on your nightstand.

Amazon | Audible

Best books for entrepreneurs - Daring Greatly: How the Courage to Be Vulnerable Transforms the Way We Live, Love, Parent, and Lead by Brené Brown

Daring Greatly: How the Courage to Be Vulnerable Transforms the Way We Live, Love, Parent, and Lead by Brené Brown

Author and spirit-animal/soulmate to Oprah, Brené Brown is read and beloved by millions who have used her wisdom to get past the emotions and habits holding them back in life, business, and relationships. If you struggle with relating to your team, or find that you talk yourself out of opportunities, any one of her books may offer insight into getting past these patterns and making progress.

Amazon | Audible

15 of the best books for entrepreneurs from classics to new releases (and even a little inspiration outside of the business section). Click to Tweet.

15 of the Best Books for Entrepreneurs, recommended by SureSwift Capital

Best books for entrepreneurs - Let My People Go Surfing: The Education of a Reluctant Businessman by Yvon Chouinard

Let My People Go Surfing: The Education of a Reluctant Businessman by Yvon Chouinard

Hear in his own words how the legendary Patagonia founder Yvon Chouinard went from a young rock climber seeking the next thrill to running one of the most successful and recognizable outdoor brands. With a laser-focus on doing right by both people and the planet that’s made him beloved by customers and employees alike, Chouinard is a model for the 21st-century CEO.

Amazon | Audible

Kevin McArdle, Co-Founder & CEO of SureSwift Capital“A great, behind-the-scenes look at the unique way that one of America’s greatest brands was built.”
Kevin McArdle, Co-Founder & CEO of SureSwift Capital

Best books for entrepreneurs - Hustle: The Power to Charge Your Life with Money, Meaning, and Momentum by Neil Patel, Patrick Vlaskovits, Jonas Koffler

Hustle: The Power to Charge Your Life with Money, Meaning, and Momentum by Neil Patel, Patrick Vlaskovits, Jonas Koffler

A great book for the newbie or aspiring entrepreneur, consider Hustle your personal coach. This book is packed with inspiration for quitting your day job, starting your own business, and taking leaps in your life.

Amazon | Audible

Best books for entrepreneurs - Grit: The Power of Passion and Perseverance by Angela Duckworth

Grit: The Power of Passion and Perseverance by Angela Duckworth

Duckworth has good news for bootstrappers: It’s grit, not genius that turns out to be the biggest predictor of success. If you started a business solo, that usually means there will be areas that are outside your wheelhouse. Maybe you’re a great programmer, but the marketing side’s a bit of a mystery to you, or vice versa. Or maybe your business is going great, but the next stage means management, which you’ve never done. Grit will teach you to meet challenges in business and life with passion and persistence.

Amazon | Audible

The Best Books for Bootstrapping Entrepreneurs: Finding Inspiration Outside of the Business Section

Sometimes the best books to help entrepreneurs to find inspiration are a little less obvious. Just like Archimedes in the bathtub, here a few more out-of-the-way places you might find your own “Eureka!” moment.

Wooden: A Lifetime of Observations and Reflections On and Off the Court by John Wooden & Steve Jamison

Wooden: A Lifetime of Observations and Reflections On and Off the Court by John Wooden & Steve Jamison

A great read if you’re getting ready to scale your business with new hires. A lot of things that work for managing a team on the court apply to life off the court as well.

Amazon | Audible

Marvin Russell, Founder of MySiteAuditor, part of the SureSwift Capital portfolio“John Wooden! The winningest coach in NCAA history. But he never talked about winning to his team. He believed that if you focused on perfecting the small things, then winning would take care of itself.”

Marvin Russell, Founder of The Ocean Agency, MySiteAuditor, and Checkli, and Growth Advisor for SureSwift Capital

Best books for entrepreneurs - The Art of War by Sun Tzu

The Art of War by Sun Tzu

There’s a reason this book has been a favorite of savvy entrepreneurs since before the days of Mad Men, and is still wildly popular in Silicon Valley today. Consider it a metaphor for running your business, and put it in your cart now if you’re launching in a competitive space. Snap Chat founders Evan Spiegel and Bobby Murphy famously bought it for every one of their six employees when Facebook’s Mark Zuckerberg was digging for information on their business plans after they rejected his offer to buy their company.

Amazon | Audible

Best books for entrepreneurs - The Alchemist by Paulo Coelho

The Alchemist by Paulo Coelho

It’s hard to describe this one without giving spoilers, so we’ll leave it up to our VP of Product, Tom Kincheloe, who re-reads it every couple months.

Amazon | Audible

Tom Kincheloe, VP of Product for SureSwift Capital“I pretty much never read ‘business’ books unless it’s required reading, but I’ve read the Alchemist every one to two months for over six years now. This is my favorite business/entrepreneur book by a mile, even though almost no one would classify it as such. It’s a book about life and living in the now. Two lines I love from it are, ‘People are capable at any time in their lives of doing what they dream of,’ and  ‘If you improve on the present, what comes later is better.’ Business shouldn’t be that different from life.”

Tom Kincheloe, VP of Product for SureSwift Capital

The Journey from Founder to Entrepreneur

The Journey from Founder to Entrepreneur

“Co-Founder and CEO.” That’s what it says on my business card, on the signature line of my emails, on my LinkedIn profile, and my Twitter bio. The “Co-Founder” part tells you that I started SureSwift Capital with a partner. The “CEO” part means that I’m ultimately accountable to my team for creating an environment they can thrive in, and for the overall success or failure of the business. So it’s correct and complete… but it isn’t the title I’m proudest of today. That title is Entrepreneur.

This topic has been on my mind for awhile as SureSwift has rapidly grown and evolved over the past 3 years from an idea into a business, and now into a portfolio of more than 30 online companies with a team of 80 people across the globe supporting it.

What’s the Difference Between an Entrepreneur and a Founder?

Let’s look at the definition of a Founder.

Found·er
/ˈfoundər/
noun
noun: founder; plural noun: founders
a person who establishes an institution or settlement.

We’re not settling new lands here, so let’s ignore that part. “Establish an Institution.” That’s important — starting something new. The world is a better place when people start new businesses (or nonprofits, schools, etc.).

We have businesses in our portfolio that generate leads for SEO agencies, software that replaces manual data entry, and apps that turn your smartphone into a pocket payment processor. These companies were all founded by just one or two people who wanted to solve a problem and make things better.

But you can call yourself a Founder from the moment you have an idea, a company name, and a website. And we all know the stats on the success rate of new businesses. Building and sustaining a financially viable company is incredibly challenging, and it’s why many Founders will never make it past the idea stage.

Creating and operating a successful business is neither easy or simple. People who do that well deserve some applause.” – Tren Griffin Click to Tweet.

However, some, like the Founders we mentioned above, will take the next step. They’ll bootstrap their idea into a business. Maybe it will start as a side hustle and they’ll have to hang on to their day job. A small percentage will start making enough to quit the day job. An even smaller percentage will hire a few contractors and continue to grow.

At SureSwift, it’s usually around this stage of the business when our Founders realize they’re really Entrepreneurs and that they want to take this crazy journey all over again. In fact, wanting to start up a new project is the primary reason for the majority of our acquisitions.

So When Does a Founder Become an Entrepreneur?

You can call yourself a Founder as soon as you have an idea, a company name, and a website. Becoming an Entrepreneur means going to the next level.

You can call yourself a Founder as soon as you have an idea, a company name, and a website. Becoming an Entrepreneur means going to the next level.

Let’s take a look at what defines an Entrepreneur.

en·tre·pre·neur
/ˌäntrəprəˈnər,ˌäntrəprəˈno͝o(ə)r/
noun
1. a person who organizes and operates a business or businesses, taking on greater than normal financial risks in order to do so.
2. a person who organizes and manages any enterprise, especially a business, usually with considerable initiative and risk.
3. an employer of productive labor.

To become an Entrepreneur is a different level. Really, it’s the next level.

To organize and operate a business that becomes bigger than you is one of the most rewarding and challenging things you can take on in the business world — it takes a special blend of persistence, caffeine, and insanity. Click to Tweet.

Coming up on our 32nd acquisition, we’re still working on perfecting that blend, but I think we’re getting pretty good at it.

To take on “greater than normal financial risks” in support of your goals is something the world really needs. If we don’t have people who are willing and able to take on those risks, we might just have a lot of ideas without enduring action and results.

From the beginning, we’ve used our own capital and only acquired profitable and stable companies, so while we’re a relatively new firm, we’ve managed a positive cash flow from each acquisition, and we invest money back into the companies we run so we can keep doing more for their customers.

An “employer of productive labor.” As awkward a phrase as that is, it’s pretty important! Entrepreneurs are the fuel of our economy. Think about all of the tech companies that started in someone’s garage that now employ thousands of people all over the world.

SureSwift started with just me and my Co-Founder, although I worked from my home office and coffee shops — much more comfortable than a garage. In less than 4 years, we’ve grown to a fully remote team of 80 people across 14 timezones who do amazing work for our customers every day (we’re hiring, by the way). And that part of our company’s journey — growing from two people to 80 — has been both the most challenging, and the most rewarding.

So a little less than 4 years ago, when SureSwift was just an idea and a website, I was able to call myself a Founder. And I’ll always remember the first day it was established — July 4th, 2015 — as my “Independence Day” from corporate America.

And two years ago, when it was clear this was going to be an enduring business with a growing portfolio and team, I felt like I was able to call myself a CEO.

But today, with a portfolio and team that are continuing to grow into something bigger than myself, and bigger than I ever imagined back on that first day, I’m able to call myself an Entrepreneur. And this is the title I’ll always be proudest of.

How to Prepare Your Startup for an Exit (or Anything Else)

How to Prepare Your Startup for an Exit (or Anything Else)

Nine out of ten startups will ultimately fail. Only 44 percent of small businesses make it to their fifth year, the timeframe when an acquisition becomes most likely. We’ve all heard these sobering statistics. In light of them, it makes sense that most businesses never create an official exit plan. Unfortunately, that oversight can hurt your business in both the short and long term.

There are a lot of reasons to have an exit plan for your business, even if you’re not considering a sale right now.

A strategic exit plan will cover a lot of the same areas as a contingency plan, making your business more resilient and protecting it from unforeseeable events. Smart founders should always have one. Click to Tweet.

No idea how to come up with an exit strategy for your business? No problem.

Follow these 8 simple tips to streamline your business operations and prepare your business for any event, whether it’s growth and scale, a sale, or anything in between.

1. Keep Business and Personal Records Separate

A lot of people use the same bank account, email address, and other resources for personal and work purposes, but as a business owner, you need better separation. At the very least, you need to make sure you have a separate bank account for your company and that you’re sending and receiving any business related emails using your business’s domain name, not a Gmail account.

You should also consider having a unique email account for distinct functions. For example, you could handle customer questions and communications with an email address like “support@your-domain.com,” while moving any discussions about business leads to “sales@your-domain.com.”

Keep your personal communications, including networking, in a personal account like first-name@your-domain.com. If you have part- or full-time employees, you’ll want to do this for them as well, and make sure they understand what types of communications should be sent from which account.

It’s also worth mentioning that your business website should be hosted on its own server with its own hosting account, with the cost of hosting applicable to your business only.

Why It Matters

All the time:

  • Keeping records clearly segmented allows you to hand over access to a business account to a future partner or employee, with all the relevant information remaining in the account.
  • By using different email boxes for different functions, important emails live with the job vs. with an individual employee. Even if you’re a one-man or one-woman shop right now, you may want to hire a customer support or sales person in the future. On the flip side, in the unfortunate event that you need to let an employee go, you can easily move the emails associated with that job to a new hire.
  • It looks more professional to your customers and sales leads.

During a sale:
If you decide to sell your business, you’ll be required to transfer ownership of all “business records,” which includes financial records, as well as business email addresses and communications.

Separating personal accounts from business ones means you can hand over accounting records to show the company’s financial history without having to sort out personal expenses. In terms of email, simply delete any personal communications on your “first-name@your-domain.com” accounts and hand over the relevant emails for your support, sales, and other business functions.

2. Create Centralized Storage and Strong Business Passwords

Using a password management app like 1Password makes creating and managing your business passwords a cinch.

Using a password management app like 1Password makes creating and managing your business passwords a cinch.

Even lifestyle businesses with the simplest possible setup are going to have to manage a handful of passwords. At this point we all know passwords should be unique for each site or app so you don’t run the risk of compromising all of your accounts if one gets hacked.

But knowing something is different than actually doing it. Many small business owners opt for the convenience of making passwords easy to remember over making them strong and unique. This might be why cyber attacks are increasingly targeting small businesses.

Fortunately, there’s an app for that. At SureSwift, we use 1Password to manage passwords easily and securely across our portfolio, and it works extremely well for our remote team. Inside the tool you can create separate “vaults” for business and personal use, or make a vault for each product line you manage.

Why It Matters

All the time:

  • Having a strong password management policy in place can protect your business from time-consuming and costly cyber attacks.
  • Centralizing access to your accounts means that someone can step in and take care of daily operations if you’re unable to.
  • This setup also allows you to grant access to relevant accounts to current and future employees or consultants in a couple clicks.
  • If you have to let an employee go, it’s easy to keep things secure without having to change multiple passwords.

During a sale:
If and when the time comes to sell a business you can easily transfer data from your password vault to a new owner, instead of spending weeks chasing down all your logins. Should your significant other or family need to sell your business for any reason, not having access to various accounts can significantly reduce the sale price.

3. Track Your Income and Expenses (aka P&L) Monthly

Create Profit & Loss statements easily using our free online Google Sheets P&L template.

Create Profit & Loss statements easily using our free online Google Sheets P&L template. Enter your email below to receive a link to the template.

There are plenty of accounting tools and apps out there to help you keep track of your revenue and expenses, and you can even DIY it with a good old Excel file or Google Docs sheet.

Whatever your preferred tool, you’ll want to track your revenue and expense categories on a monthly basis to give you a better understanding of your business finances.

Why It Matters

All the time:

  • Creating and reviewing a monthly P&L statement can help you understand things like your profit margin, your biggest expense categories, shifts in revenue sources, ongoing vs. one-time costs, and opportunities to optimize outflow.
  • Doing your accounting monthly is much more manageable than a once-a-year binge session right before tax time. Most accounting software will let you connect to your financial institutions (bank accounts, payment processors, etc.) and with a little setup you can have expenses automatically filed to the appropriate tax categories. I’ve been using GoDaddy Bookkeeping (formerly Outright) for my startups, and at $119 a year it’s a business expense that’s been well worth it.

During a sale:
Understanding your monthly P&L’s will help you position your profit margins and revenue potential to a prospective buyer. Having well organized financial records can also be a signal to them that your company is well managed, and can make your sale move faster.

4. Use a Revenue Analytics Software

Do you know what your major Key Performance Indicators (KPIs) are, and do you have an easy way to track them? New MRR, churn, LTV, and many more common KPIs are automatically calculated by revenue analytics products like ProfitWell (bonus: it’s free), and some of these metrics even come built in with subscription processing platforms, such as ChargeBee. We’ve also used and recommend BareMetrics, ChartMogul, and FirstOfficer.

Why It Matters

Data on KPIs is useful for you to run and grow your business, and transparency on your KPIs is very attractive to potential buyers, as it paints a good picture of the business’s performance, and helps predict future performance as well.

5. Hire Help For Critical, Time-Sensitive Work

For businesses making less than six figures annually it’s not uncommon for the founders to do a lot of work across a variety of functions themselves. For online businesses, it’s a smart move for founders to take care of customer service in the early years, regardless of revenue. Keeping tabs on customer happiness and ensuring a feedback loop feeds your product roadmap and can help fuel growth.

However, hiring a part-time freelancer to handle some of your critical operations, such as customer service or bug fixes, is a good move for a growing business because it creates a backup resource and makes your involvement in day-to-day operations less critical.

Not sure where to start looking for a freelancer? Ask for a recommendation from your connections on LinkedIn, or try a platform like UpWork.

Why It Matters

All the time:

  • If you get sick, want to take a vacation, or need to step away from your business for awhile unexpectedly, you’ll know things can keep moving without you. This is especially important for businesses with only one or two founders.
  • Once you delegate time-sensitive tasks, you may find you can actually add more value by focusing on bigger growth initiatives.

During a sale:
If you sell your business, chances are it’s because you want to move on to another project after a transition period vs. staying involved in the day-to-day operations. (In fact, pursuing another project is why I sold my business, HelpTeaching.com, to SureSwift back in 2016.)

Having an established team, even if it’s just one or two freelancers, who are familiar with the business and its most critical operations, can be very appealing to a potential buyer.

6. Hire a Remote Team

Slack helps the distributed, full remote team at SureSwift Capital communicate about projects and socialize.

Communicating with a remote team isn’t as hard as you think with the help of apps like Slack and Zoom. At SureSwift we use Slack to discuss work and to socialize.

It’s nice to be able to meet and work with your team members in person, but your business location might come with serious drawbacks when it comes to hiring.

Why it Matters

All the time:

  • When you look for a local hire you limit your potential talent pool significantly, and you may not get the best person for the job. A lot of companies, including SureSwift Capital, grow and succeed with fully remote teams, using tools like Google Suite, Slack, and Zoom, and you can too.
  • If you’re located in an area where a high cost of living has driven wages up (Silicon Valley, New York City, or Boston, for example), hiring remote can also help you manage expenses.
  • By creating a team working across different time zones, you can establish better coverage for 24/7 tasks like customer support without asking anyone to work odd hours.

During a sale:
Whoever acquires your business may not be located in the same location you are. Having a remote team that can work from anywhere means a sale won’t impact their ability to keep working in the business with the new owners, should they desire to keep them on.

7. Protect Your Intellectual Property

Developers own the copyright to their code, so be sure you have contracts in place that transfer IP to your company.

Developers own the copyright to their code, so be sure you have contracts in place that transfer IP to your company.

Did you know that engineers, developers, and programmers own the copyright to their code, just as artists own the copyright to their works? Since this is the case, you’ll want to take some steps to make sure your business owns the recipe to your “secret sauce.”

Make sure you have a contract for all freelancers and employees that transfers IP/copyright ownership back to the business for any work they do. Other things you might want to cover in an agreement are an “at-will” employment relationship, non-employee status, as well as non-compete and non-poaching clauses. You should always have your agreements and contracts created by an attorney, but you can use free legal templates from UpCounsel as a starting point.

Why It Matters

All the time:

  • If anyone else touches your code, you don’t want them to be able to make an IP claim on it.
  • If you have a great product name (and a domain to match) that’s descriptive and keyword rich, you should consider getting it trademarked to prevent competitors from using it. You can search for existing trademarks for free to help you decide if you should pursue this further, but consult an attorney on whether it makes sense for your business. Sometimes trademarks aren’t very enforceable and offer limited protection.

During a sale:
When a tech company is acquired, IP can have an impact on company valuation, so the extent to which you can show that your software is unique and that the IP is held by the business (and no one else) is important to a successful sale.

8. Collect Data for Analytics

Good data is invaluable for business decision making, but it has to be collected first.

Good data is invaluable for business decision making, but it has to be collected first.

If your website doesn’t have analytics installed to gather stats on your site visitors, or your email marketing doesn’t use tracking to help analyze performance, the opportunity to collect that data is lost forever.

Google Analytics is a free tool that has become the standard across a variety of web platforms and content management systems, so sign up for an account and install it on your website if you haven’t already.

In addition to using Google Analytics for basic data collection, consider setting up goals to help you track conversions (account creation, trials, etc), and use _utm parameters on the links in your marketing emails to help you identify visits to your website from your email campaigns.

Not your area of expertise? Hire a freelancer to help you set up goals and create a dashboard with KPIs you can easily check.

Why it Matters

All the time:
The conversion and engagement data you collect and analyze in the early stages of your product development can become a critical factor in your business’s success or failure.

If you’re not using data to make your business decisions, you’re just guessing. Click to Tweet.

During a sale:
Historical data can be critical to show audience growth patterns, conversion rates, and customer engagement, all of which can help turn a potential sale into a done deal. It will also help future partners or prospective buyers connect data to decisions you made in the past, and ones they’ll make in the future.

So there you have it: 8 simple tips you can use to make your operations stronger, starting today. The entrepreneur’s to-do list is never done, so go through and prioritize these items based on your specific business, and then schedule the time to make them happen. Your future self will thank you, whether or not you ever sell your business.

6 Reasons Every Entrepreneur Needs an Exit Plan

6 Reasons Every Entrepreneur Needs an Exit Plan

If you’re an entrepreneur whose business or side hustle is generating profit, the last thing on your to-do list might be making a plan to sell that business. Unfortunately none of us can predict the future, and there are a variety of reasons people wind up selling their companies before they thought they would.

So while growth, hiring, or bringing on a partner is probably way higher up on your list of entrepreneurial concerns, coming up with an exit strategy now is something that can have big benefits later. A strategic exit plan allows for better outcomes, and can make the process much less stressful since you’ll have an idea of what you need to do if and when you do decide to sell.

Need more convincing? Here are 6 of the top reasons we see business founders sell before they thought they would.

1. Major Life Events

Having kids means shouldering a whole new set of responsibilities, and it’s just one example of a life change that could impact your ability or desire to run a business.

Having kids means shouldering a whole new set of responsibilities. It’s just one example of a life change that could impact your ability or desire to run a business.

As the years go by, your life will inevitably change. Getting married, having kids, or caring for aging parents are just a few examples of things that might alter your ability or desire to continue running your business.

This is especially true for solo founders. Without a partner to step in and shoulder some of the workload, there’s not anyone who can make the business a priority when you’re not available. Selling before profits decline may suddenly become an appealing option if your other choice is to close up shop.

How to Incorporate It into Your Exit Plan:

  • Get an understanding of how long things can go in your specific business before there are issues. Is it a day? A week? A month? Some businesses may not take much maintenance, while others may require constant attention.
  • The length of time you can let it go is probably different depending on the type of work, so you’ll need to make a list of which tasks are critical. For example, you may be able to get away without doing your accounting for a month, where going a few days without shipping or customer service would put you out of business.
  • If possible, come up with a plan to backup your critical functions. Find out if there’s a service or person you could hire temporarily. If you can afford it, test things out on a short vacation so you can understand pricing, as well as any pros and cons.

2. Burnout

Passion for your business is a must for any successful entrepreneur, but all work and no play can lead to burnout.

Passion for your business is a must for any successful entrepreneur, but all work and no play can lead to burnout.

It happens to the best of us. You work 40-60 hours a week for years, too busy to optimize or hire help, and you hit a point where you simply can’t go on. Burnout is nothing to be ashamed of. In fact, there’s evidence that entrepreneurs are even more likely to experience it than employees in a larger organization.  And unfortunately, curing burnout isn’t always as simple as taking a vacation, especially if you have no choice but to take work with you.

How to Incorporate It into Your Exit Plan:

  • First, make sure that you’re spending your time effectively. Use a time log to track where your hours go, and make an honest assessment of which tasks are really moving your business forward.
  • If you’ve already optimized your time management and you’re still slammed, decide on a reasonable Monthly Recurring Revenue (MRR) figure that will allow you to hire part- or full-time help. Many business founders will tell you they waited too long to make their first hire.
  • Take a look at which tasks are critical to your business, which ones you spend the most time on, and any you don’t feel especially passionate about. If a task is in all three of those categories, it’s a no-brainer to hire it out as soon as you hit that MRR goal.
  • When you’re ready to hire, spend time writing up a job description that includes info about your company’s mission, how the position contributes to the success of the business, and be as specific as possible about skills and personality traits you’re looking for. Planning your first hire like this can also be a great motivator to hit your revenue goals.

If you’ve been in business for more than 5 years, are still working crazy hours, and aren’t close to the MRR numbers that would allow you to hire someone to help you, it might be time to think about whether you fall into the next category.

3. Hitting a Limit on Expertise

Many entrepreneurs will run into challenges that may be outside their area of expertise as their business grows and changes.

Many entrepreneurs will run into challenges that may be outside their area of expertise as their business grows and changes.

As a business grows, it’s natural to find that the skill set needed to make it successful evolves, too. A common example of this is when SaaS entrepreneurs run into scaling and performance challenges that fall outside their area of expertise. This was the case for one of our founders, Marvin Russell, when he wanted to scale his SEO lead generation tool. You can check out our interview with Marvin for the story behind building his business, and why he ultimately sold it.

How to Incorporate It into Your Exit Plan:

  • This can be a tricky one, and it requires a good deal of self awareness. Start by taking an inventory of what you’re best at, and what you love to do.
  • Next, write down the skills needed at your business to maximize growth.
  • If the two lists don’t overlap, you’ve probably hit an expertise limit, and it’s a good time to consider your options. In some cases, you might be able to bring in a partner, or simply hire for the skills you need. In other cases, selling may make more sense.

4. Co-founder Disagreement

Locking horns with co-founders is one of the top reasons startups fail, but disagreements can happen at any stage of your business.

Locking horns with co-founders is one of the top reasons startups fail, but disagreements can happen at any stage of your business.

Whether it’s a disagreement over equity share, strategy, or the future of the company, co-founder disagreements happen. You can avoid some of the common causes of conflict by signing an agreement with a vesting schedule prior to starting a venture, outlining everyone’s roles and responsibilities at the outset, and deciding ahead of time what happens to equity split when goals aren’t met or work load shifts.

Co-founder buy out is always an option, in theory, but depending on your business’s size and your finances, it may not be practical or feasible for one of you to buy the other’s share. If things get so bad that they’re affecting business performance, selling might make more sense than toughing it out.

How to Incorporate It into Your Exit Plan:

  • If you’re considering a partnership, start by making sure that you and your potential partner have some common ground, because business always has a way of getting personal.
  • Do as much pre-planning for as many scenarios as you can before formalizing any business agreement. A handshake deal might seem appealing for its simplicity, but talking about possible areas of disagreement when a relationship is in a good place makes it much easier to navigate conflict later down the road.
  • Put something in writing. Especially when it involves money. It’s well worth the cost to hire a lawyer and draw up the appropriate documentation. If you hit it big, you want to celebrate with your partner, not spend your time haggling over shares, vesting, and equity.
  • If you’re experiencing conflict with a co-founder, never avoid it in hopes it will go away. Find the time and resolve to work through your issues productively. If things are really bad, consider hiring an executive coach to facilitate a conversation and help you develop a framework for resolving issues.

5. Pursuit of Another Project

If you’re more excited by dreaming up your next business than you are working on your current one, it might be time to sell.

If you’re more excited by dreaming up your next business than you are about working on your current one, it might be time to sell.

Once an entrepreneur, always an entrepreneur. If you’re like most founders, you have a running list of projects you’d like to start. Wanting to start working on a new business idea is actually the primary reason for most of our acquisitions at SureSwift. The founders got their company to a certain place, and then their interests shifted and they wanted to put time and energy into a new project. In fact, this is the reason I sold my business, HelpTeaching.com, to SureSwift back in 2016.

How to Incorporate It into Your Exit Plan:

  • Starting a business doesn’t need to be a lifetime commitment, and for the vast majority of founders it won’t be. Go ahead and keep a list of other projects you’d like to start, and take some time to reflect on your personal goals for your current company.
  • As you work on your business, keep tabs on which stages spark your passion. Do you love bootstrapping an idea and getting it off the ground, do you get a kick out of making that first hire and knowing the business is bigger than just you, or do you dream of managing a big team across many locations?
  • If your business outgrows the stage you like best, or you just feel boredom setting in, it might be time to sell it to someone who has the skills and passion to take it to the next step so you can move on to something else.

6. Strategic Buyout

Sometimes a buyout has been part of your plan since day one. Here’s why you should look outside your circle of competitors for potential buyers.

Sometimes a buyout has been part of your plan since day one. Here’s why you should look outside your circle of competitors for potential buyers.

This last reason isn’t necessarily unplanned like the others on our list. But since a buyout by a bigger competitor is what a lot of founders dream of when they start a business, we thought we’d address it here.

Buyouts by bigger competitors aren’t as common as you’d imagine. This is because the cost and complexity of acquiring a business with the same knowledge, services, or skills doesn’t usually pencil out compared to organic growth. Acquisition offers are more likely to come from businesses that offer an adjacent or complementary service or product, or private equity companies, like SureSwift, with a business model that’s based on acquiring businesses in a specific sector.

How to Incorporate It into Your Exit Plan:

  • Keep meticulous financial records of your cash flow, profits, losses, annual growth, and MRR. If an acquisition opportunity comes up, you’ll be well prepared.
  • Network with founders of companies who offer a complimentary or adjacent product or service, and look for opportunities to co-promote your offerings. Even if they never make you an offer, both of your bottom lines may benefit.
  • Do some research on whether there are any companies that acquire businesses like yours. For example, at SureSwift, we focus on online businesses, and we acquire SaaS companies, subscription-based services, as well as the occasional content-based website.
  • Depending on your industry, there may be private equity firms that specialize in it. Find out who they are, what they look for in an acquisition, and reach out when you’re generating profit and considering a sale in the next one to two years.
  • If you’re serious about selling, and the above notes aren’t options for you, consider talking to a business broker.

Whatever your present circumstances, make sure your business is ready for change. Because whether it arrives tomorrow, or 5 years from now, you can be sure of one thing — it will arrive. Click to Tweet.

Hopefully we’ve convinced you that even if you’re not considering selling your business today, it’s still wise to have an exit plan. If one of the situations we’ve outlined here applies to you, talking to other business owners, a broker, or a prospective buyer can also help you understand the sales process and address any concerns.