You wouldn't start on a journey without a plan for where you're going, and the same can be said of starting a business. Greg Shepard, a founding partner of BOSS Capital Partners, has dedicated his life to understanding how to build and sell businesses on a large scale. Today, he's here to share his One Big Tip for entrepreneurs who are struggling to get their company off the ground and into the hands of a buyer.
Develop a North Star
Throughout his decades of experience, Greg has found that there is one common denominator among businesses that fail—they lack a north star. According to Greg, a north star is like a roadmap allowing you to get from point A to point B. Without it, you'll never get to where you're headed. Greg outlines the elements of a business' north star as:
- What - "What is your business and what is your product?"
- Who - "Who is your ideal buyer profile, the ideal buyer of your business, and the ideal customer profile, the customer that you're selling the product to?"
- Why - "Why should somebody buy your product? And why should somebody buy your company?"
- When - "When are you planning on selling your businesses? What's the time horizon?"
- How Much - “Understanding how much you're going to sell for is critical to understanding how strategically you're going to plan out your rounds of funding and your valuation along that path.”
"Northstar is beginning with the end in mind," Greg says. "It helps you identify all of these individual elements so that you can begin your journey as a startup entrepreneur, heading towards what you know is going to be the eventuality of your business."
It's this kind of mindset that distinguishes the trailblazers that burn brightly for a short period and the giants that come in and do it better.
"You could just go around the world and look at these businesses that have been digested by other companies," Greg observes. "The first company blazing the trail and getting knocked in the head and having to pull rocks and vines like going through a jungle with a pocket knife. And then the second mover has a trail already there, so they can just catch up to the first mover quickly and stand behind them until they have the opportunity to pass."