You’ve played the lottery and the slots often enough to realise that the odds are stacked against you. You’ve tried a few ‘get rich quick’ schemes to no avail and day-trading is too stressful. You’ve worked for a salary that keeps your head above water, but doesn’t provide the luxuries you want. It’s time to get serious. Time to build a business and sell it – that’s the way to get rich.
This is how you do it:
First, you need a business idea – and the best ideas are improvements (or disruptions) of an existing idea or practice. Or a more targeted version. A better mousetrap. An Instagram dedicated to expectant dads. Find an improvement to an existing trend; don’t try to create a brand new one. It’ll take too much time and money, and you’re short of both.
Figure out how to protect your idea; identify your secret ingredient that cannot be exactly matched. Don't go for expensive patent applications for protection - they take too much time, cost too much money and people will find a way to circumvent them if they want to. Go for speed and agility.
Next, create a company with a catchy name and start your business – and do it on a shoestring. Make sure you can get the domain for your catchy name - search for it online with providers like this. And make sure to register the name with social media.
Register your company with Companies House using a business setup agent like this. They will give you a business address and from there they will send you to a bank to get a business bank account and cards.
Keep all the company’s shares to yourself. Build your Minimum Viable Product (MVP) to test your product or service.
Next, your MVP assumptions will be wrong, so change them and rebuild. Pivot. Make changes (and more changes) to make it better and keep testing. Your customer experience must be intuitive and frictionless – like skiing downhill on a perfect slope. Focus on the customer facing side of your business - do the backroom on spreadsheets and post-it-notes.
Next, start marketing and selling. Don’t worry about profit, worry about turnover. You need customers to buy your product or service. And when they like it they’ll recommend it to their friends. You will cut costs and refine later to build first your gross profit, then your net profit.
Next, grow. Do things yourself until you’re bursting at the seams for support. Hire lean. Use freemium software (skip the pay-wall extras) to keep track of things. And use spreadsheets. Keep all the company’s shares to yourself. If you have to offer a new employee some shares by way of incentive, promise them share options, which become worthless when they leave, which they will.
Then, when you’ve got some customer traction and need money to grow faster, go for some investment. Pitch to angels; people who have a higher appetite for risk. Or, if you can raise a cornerstone, then go for crowdfunding. Sell yourself first, then the business idea, then what your customers love and then the finances. Focus on why people buy from you. Don’t dilute your own shareholding by more than 15%. A dragon who wants 50% is looking out for themselves, not you.
Then, grow more. Make yourself redundant – which means do every job yourself and then carefully hire better people to do each job in your place. Set clear principles and objectives for the team - let them get on with their jobs, but follow up daily. Grow more and watch the cash runway like a hawk. Cut your expenses hard and quick if you need to. Travel economy, always.
Then, go for another financing round – another angel, more crowdfunding, or maybe Venture Capital. Sell new shares to give the company money and some of your own shares to give you money. Investors know that giving founders cash can divert attention away from the business to the new yacht – so don’t be greedy and stay above 50% control at all costs.
Then grow more. Hire more people who are better than you. Carefully delegate managerial and financial authority around a planned organisation structure. Appoint a board. Go on holiday and see what happens. Can the business survive without you? If you’ve hired the right people it should thrive without your interference. Focus on new innovations but watch (and course correct) the numbers every single day.
Next, quietly promote your business so potential buyers might find you. The best sale is when the buyer finds you. Don’t go overtly looking for a buyer for your business – the terms will be horrible. If anyone asks, you’re not for sale – business is too good and you’re growing fast.
Then, one day someone comes in with an offer. Negotiate hard, like you’re selling your first-born. Be prepared to walk away. But then accept a good offer. Sell for cash, not shares, and keep your earn-out as small as possible.
Now you’re rich, with money in the bank and time on your hands. Give yourself 6 months to de-stress and rebuild bridges with your loved ones – and wait for the ‘I’ve had an idea’ moment before you kick off again.
Repeat.
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