What really distinguishes so-called serial entrepreneurs from their cousins, the merchants, brokers, and individual service providers, is their constant reinvestment in brand equity. For them, it’s not enough to just build themselves a job, or even create a legacy for their kids to inherit. For them, they are building a brand with the express purpose of monetizing its value at some future date. No matter what business they are in, they know they are in the brand-building business.
Every market sector has its key metrics that must be achieved before serial entrepreneurs can even think about monetizing on their brand equity. These metrics include, but are not limited to: annual volume in units and dollars; market penetration and share; rate of growth; and regional performance.
So, no matter what you are selling, there is a number you have to achieve to be an attractive acquisition, merger, or public offering. And to get to that magic milestone requires constant reinvestment in growth.
Serial entrepreneurs are not necessarily in it for the current profitability because they reinvest their profits in growth. In other words, they often don’t get paid until the end. What happens if they try to get paid early and just coast for a while? The competition takes over, they lose their momentum, and actually start backsliding.
Interestingly, few first-time entrepreneurs realize this and have the mistaken idea that their business should support them. And it may, to a degree. But the more profits the owners take out of their company, the more likely they will be trapped in it. If they stop working, there’s no more income, and no one will buy them because they have not yet achieved the key metrics.
When business owners finally discover that they have to grow or die, many are discouraged. We advise students of entrepreneurship and clients alike that if they want to monetize their brand equity, they need a strategy for the long haul. They need to be ready to swim upstream for quite a while. They need to be working for that payday in the future.
Contrary to popular belief, your brand does not have to be huge to be acquired or to attract a merger with a big capital infusion. It just has to show that it is screaming in a small sector of the market or geographic area. Your acquirer can do the math and figure out the scalability.
This is why we recommend that brand builders start small and get the reputation of being a “hot mover” even if in a small area, rather than a mediocre or “slow mover” in the wider market. Sometimes it’s better to never have been in a market that to have been there and failed. This is why it’s essential to have your own representatives to police each new market you expand into. That’s one of the big areas where the reinvestment in growth is essential.
And when that pay-off day comes, what do serial entrepreneurs do? Retire? Not hardly! After a well-deserved hiatus, they are right back at it, on a new venture.
Who We Are
Michael Houlihan and Bonnie Harvey co-authored the New York Times bestselling business book, The Barefoot Spirit: How Hardship, Hustle, and Heart Built America’s #1 Wine Brand. The book has been selected as recommended reading in the CEO Library for CEO Forum, the C-Suite Book Club, and numerous university classes on business and entrepreneurship. It chronicles their humble beginnings from the laundry room of a rented Sonoma County farmhouse to the board room of E&J Gallo, who ultimately acquired their brand and engaged them as brand consultants. Barefoot is now the world’s largest wine brand.
Beginning with virtually no money and no wine industry experience, they employed innovative ideas to overcome obstacles, create new markets and forge strategic alliances. They pioneered Worthy Cause Marketing and performance-based compensation. They built an internationally bestselling brand and received their industry’s “Hot Brand” award for several consecutive years.
They offer their Guiding Principles for Success (GPS) & Shelf Smarts courses to help consumer product brand builders achieve success. Their book, The Entrepreneurial Culture: 23 Ways To Engage and Empower Your People, helps corporations maximize the value of their human resources.
Currently they travel the world leading workshops, trainings, & keynoting at business schools, corporations, conferences. They are regular media guests and contributors to international publications and professional journals. They are C-Suite Network Advisors & Contributing Editors. Visit their popular business site at www.thebarefootspirit.com.
To make inquiries for keynote speaking, trainings or consulting, please contact firstname.lastname@example.org.