For many entrepreneurs, their first venture is like a child. They pour their passion and dedication into its growth, and when the time comes to exit, the sense of loss and uncertainty is palpable. This feeling won’t last forever, though, and as Richard Branson once said, “Business opportunities are like buses — there’s always another one coming along.”
The challenge is making a success of your second enterprise, swerving the dreaded “difficult second album” syndrome — that way, when you go on to your third, fourth or fifth business and beyond, you continue to develop your entrepreneurial abilities.
Young entrepreneurs who’ve made a fortune from their first business often wonder whether they were just lucky; whether they happened to catch a wave at the right moment. They know they are good, but are they great? Did they really earn their acquisition accomplishment — and crucially, can they do it all over again?
The only way to prove oneself is to repeat the process. That’s what I did, alongside my business partner Chris Lord, selling our follow-up business for more than double the value of the first. This wasn’t easy, but I believe that every founder thrives on purpose — and if you’ve nailed it once, you clearly have the experience, skills and resources to create something amazing again. Here are seven top tips for making a success of your entrepreneurial sequel.
Related: From Idea to Successful Exit — 8 Lessons Learned From Building and Selling a Startup
1. Reflect on your past experience
Before starting your next business, take some time to reflect on your past experience and analyze the factors that contributed to the highs and lows of your previous venture. What worked well and what could you have done better? What skills and knowledge did you gain that will be useful in your next entrepreneurial outing? Use this deliberation to set realistic expectations and to develop a plan for second-time success.
2. Go bigger or go home
Having gained valuable insights from your initial venture, it’s time to raise the bar and aim higher. Adopt a bullish and ambitious mindset, and don’t be afraid to fail.
You’ll likely face increased competition from other companies trying to capitalize on your success. To stay ahead of the curve, you need to be prepared to blow them away with a game-changing new idea or approach.
While aiming high, it’s crucial to maintain humility and stay grounded in reality. Past victories should not be taken as guarantees for future success. Embrace the opportunity to learn from others and remain open to their wisdom and experiences.
3. Start with your exit
Considering an exit strategy from the start is vital, as almost every entrepreneur eventually moves on. Starting with a view of the end helps you focus on building a company that is valuable and attractive to potential buyers, and helps you set the groundwork for a future departure.
For second businesses particularly, prioritizing the exit process — something you’ve experienced before — provides clarity and guides decisions. Whether selling, going public or passing it on, a clear strategy enhances value and appeal.
Related: 4 Tips for a Happy Exit From the Company You Founded and Love
4. Secure funding
A well-defined exit strategy is also key to attracting financial backers, showcasing a realistic and attainable plan for business growth and ROI. When setting out on your second entrepreneurial venture, it’s wise also to leverage your previous business success by investing some of the profit.
While you won’t be the sole investor, splashing the cash demonstrates confidence and helps calm any ‘second album’ concerns third-party backers might have. Additionally, your track record of transitioning from a risky bet to a less risky one bolsters investor confidence. As an example, Chris and I’s first venture yielded a 22 times return — eager investors, unsurprisingly, were knocking down the door when we announced our second outing.
5. Get an idea
Use the knowledge and experience from your previous venture to your advantage when starting a new one. Do your research, identify your core competencies and focus on your strengths. Don’t be afraid to take calculated risks or try new things (I pivoted from the world of e-cigarettes to sportswear remarkably smoothly). Most importantly, however, identify a clear market need and create a product or service that is truly in demand.
6. Establish a winning leadership team
As a post-exit founder, your experience and knowledge are invaluable, but you can’t do everything alone. Build a strong, diverse team of talented individuals — starting with an experienced executive assistant — who share your passion and can help achieve your goals. Surround yourself with extraordinary people who complement your skills and experience, and if you need to offer equity, or a mix of equity and salary, to attract the best talent, don’t hesitate.
7. Do it fast
After selling our first company, my business partner and I started our second on the two-hour train ride home. We reflected on what went well and what could have been improved in our initial venture and used that to develop a new idea that we were passionate about. We were willing to adapt to changes in the market and our business environment, and we were open to feedback from our customers and team, but we knew we had to act fast. And we did, with great results.
Related: 3 Factors to Consider Before Exiting Your Startup
An exceptional entrepreneurial future
Having endured the mental and emotional strain of selling their first, beloved business, it’s natural that post-exit founders should find the prospect of starting afresh scary. But let me tell you this: You have what it takes to do it again.
Keep your eyes on the prize, keep your resolve strong and don’t shy away from challenges. With a brilliant idea, a solid plan and a drive to act fast, you can achieve business success for the second time, banishing the specter of second album syndrome and paving the way for an exceptional entrepreneurial journey in the future.
Read the full article here
