GET
Colin
Barrow
BACKED
GET BIG GET
BOUGHT
Plan your start-up
with the end in mind
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GET
BACKED
GET BIG GET
BOUGHT
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GET
Colin
Barrow
BACKED
GET BIG GET
BOUGHT
Plan your start-up
with the end in mind
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This edition first published 2009
© 2009 Colin Barrow
Registered office
Capstone Publishing Ltd. (A Wiley Company), The Atrium, Southern Gate,
Chichester, West Sussex, PO19 8SQ, United Kingdom
For details of our global editorial offices, for customer services and for
information about how to apply for permission to reuse the copyright
material in this book please see our website at www.wiley.com.
The right of Colin Barrow to be identified as the author of this work has
been asserted in accordance with the Copyright, Designs and
Patents Act 1988.
All rights reserved. No part of this publication may be reproduced, stored in
a retrieval system, or transmitted, in any form or by any means, electronic,
mechanical, photocopying, recording or otherwise, except as permitted by
the UK Copyright, Designs and Patents Act 1988, without the prior
permission of the publisher.
Wiley also publishes its books in a variety of electronic formats. Some
content that appears in print may not be available in electronic books.
Designations used by companies to distinguish their products are often
claimed as trademarks. All brand names and product names used in this
book are trade names, service marks, trademarks or registered trademarks of
their respective owners. The publisher is not associated with any product or
vendor mentioned in this book. This publication is designed to provide
accurate and authoritative information in regard to the subject matter
covered. It is sold on the understanding that the publisher is not engaged in
rendering professional services. If professional advice or other expert
assistance is required, the services of a competent professional
should be sought.
Library of Congress Cataloging-in-Publication Data
Barrow, Colin.
Get backed, get big, get bought : plan your start-up with the end in
mind / Colin Barrow.
p. cm.
Includes index.
ISBN 978-1-906465-51-3 (pbk.)
1. Business planning. 2. New business enterprises.
3. Entrepreneurship. 4. Success in business. I. Title.
HD30.28.B36852 2006
658.1′1–dc22
2009009706
A catalogue record for this book is available from the British Library.
Set in 11 on 12.5 pt Adobe Garamond by SNP Best-set Typesetter Ltd.,
Hong Kong
Printed in UK by TJ International
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Contents
Introduction: Be careful what you wish for
1
Part One: GET BACKED
5
1 Problems over passion – the real characteristics of
winning business ideas
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7
2 The traits of the entrepreneur – it’s all in
the mindset
23
3 Nothing new under the sun – the same old
problems, some brand new solutions
33
4 Research, research, research
49
5 Mastering the ‘master plan’ – business plans are
templates, not straitjackets
67
6 The money – who has it and why you might just
get your hands on some of it
85
7 Another day over and deeper in debt – leveraging
the investment
106
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Part Two: GET BIG
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121
8 You must be this high to go on the ride – why
babies can’t swim
123
9 The path to growth – and riches too
128
10 Selling fivers for a tenner – why margins
matter most
150
11 Taking charge – good management’s a simple
yet rare commodity
165
Part Three: GET BOUGHT
189
12 What’s it to you? Calculating value
191
13 Dressing to kill – preparing your business for
sale and getting the timing right
202
14 Pay day – selling up
213
15 Floating off
229
16 Getting a second life
246
References
256
Resource list
257
About the Author
261
Index
263
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Introduction: Be careful
what you wish for
Every year, millions of people start their own business. They
come from every walk of life and social group. As many over-50s
as under-25s launch out on their own. The same is true for
women and men, immigrants and natives, the educated and the
barely literate, the brave and the timid, those with creative
genius or the self-confessed plodders. The triggers that unleash
their desire to go into business are equally eclectic. Legacy,
redundancy, boredom and relocation vie with insight and inspiration in the lexicon of sources of their business ideas.
They do, however, all have one common thread, one that is
often unspoken but none the less present. They hope they will
‘make it’. By that they usually mean make it rich, become super
successful and build a business empire. They rarely mention this
ambition to the armies of researchers who are continuously
trying to unravel entrepreneurial motivators. All these people
hear are phrases such as ‘personal satisfaction’, ‘for fun’, ‘being
1
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INTRODUCTION: BE CAREFUL WHAT YOU WISH FOR
able to do my own thing’, ‘working without having to rely on
others’, ‘reducing stress and anxiety’, and ‘creating employment’.
All worthy goals no doubt, but they could all be achieved a
whole lot more easily with a few million in the bank.
True, North Americans and many Asians are less ambivalent
about being upfront about their desire to be successful in business and make a pile of dough, but there is still a certain nervousness about admitting to having serious wealth creation as a
primary goal.
But here's the thing. The majority of businesses start small
and stay small. There's nothing much wrong with that, although
if that's the limit of your ambition, this book is not for you.
This book is for people who want the chance to be seriously rich
rather than just seriously busy.
AIM HIGH
Unsurprisingly, only a few tens of thousands of the millions who
start up in business each year will become millionaires. And
the rest? Well, many of these businesses will indeed make a
living for their founder, sometimes even a comfortable one,
and they may even be fun to run. But one thing you can reasonably sure about – these founders won't get rich. Instead, they
will be embarking on a regime of long hours, sleepless nights
and short holidays, and for a significant minority, the bankruptcy courts.
It doesn't have to be this way, but unfortunately most business founders start out with the wrong goals, and so
begin businesses that don't have even the potential to make
them rich. Aim low and you are almost certain to end up there.
Starting a business with the potential to be extremely valuable
can take no more overall effort than starting an also-ran. It just
requires a different kind of effort and a strategy that will enable
2
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INTRODUCTION: BE CAREFUL WHAT YOU WISH FOR
you to find investment, grow and ultimately sell up for a big
payout.
This is the way of the successful entrepreneur. In a nutshell,
the name of the game is get backed, get big and get bought –
and that's what this book is all about.
3
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GET
BACKED
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Chapter 1
Problems over passion –
the real characteristics of
winning business ideas
What are the fundamental differences between the great business that will make you seriously rich and the also-ran that does
little more than tick over?
That's an important question. A successful business that
grows rapidly and establishes a sustainable position in the market
will secure your future when the time comes to sell. An underperforming business, on the other hand, will mean long hours
of work, often for very little reward. And the truth is that
launching a new venture will require a huge amount of energy,
commitment and time on your part, so before you fire the starting gun, it's vital to think long and hard about whether your
idea has what it takes to deliver the outcome you're seeking.
It's a question that other people will be asking too. Unless
you already have considerable personal wealth, at some stage
you are going to need to raise the capital that will enable your
business idea to blossom and grow. That money might come
7
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