How to make real wealth in fashion
A fashion business owner invests more heart and soul into their enterprise than just about anyone, infusing it with their personality and flair. We all know business owners who establish and continue to own and manage the same fashion company for many years, probably quite successfully. But for many, this shift from budding entrepreneur to manager of a mature business doesn't harness their full potential. Not only is the thrill of establishing a new business gone, but they're no longer building a business and rapidly growing its capital value.
Simply put, the dividends and wages from owning and running a business are good, but where you can make real wealth is by building up a business and then selling it, giving you access to the capital value you've created.
Building or reinvigorating a business is just like building or renovating a house, once you've finished construction, you can either choose to live in it or sell it at a substantial profit, using the proceeds to do it all again...whilst banking the leftover profits. It may be a more challenging option, but your sense of self fulfilment, not to mention your bank balance will be substantially higher.
Many businesses rapidly increase in value over the first five years of life, but plateau thereafter. The secret therefore is to take your business to an acceptable value and then move on to your next challenge...using some of the proceeds to start or buy another business, whilst tucking aside the surplus sale proceeds into your investments. If you do buy an existing business, it should be one that has significant potential to increase in value.
Every business owner asks themselves how much their business is really worth from time to time. Most are stunned to find out how much capital value they have locked up in their business. Well run and profitable businesses are highly sought after and valuable. If you do find that the value isn't as high as you'd anticipated, this will at least highlight areas for focus to improve performance.
For those who do choose to sell, a key consideration is how the business will continue to function without your day to day involvement. If most decisions and functions are at least partially dependant on you, this change will take plenty of time and planning, so start early.
To get the best return on your time and efforts, you owe it to yourself to examine whether selling what you've created is the best option, freeing you to seize new business opportunities to build valuable fashion enterprises again and again.