Navigating the Future of My Successful Side Business
As my primary business reaches new heights, I find myself at a crossroads regarding my side venture. Over the past year, this project generated $60,000 in revenue, and with 2024’s year-to-date figures already standing at $46,000, it’s on track to potentially double by year’s end.
Three years ago, I made the bold decision to leave my job as a software and marketing engineer to pursue my entrepreneurial dream. Understanding the gradual nature of launching a new venture, I established this side business to help cover expenses during the initial growth phase. Now that my main enterprise is taking off, the growing demands of my primary focus leave little room for my side operation.
Initially, my instinct was to wind down the side business, but that sentiment has shifted as I recognize the value it has created and the effort I’ve invested. The dilemma now is how to best move forward. Here are some options I’m considering:
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Selling the Business: While this was my first thought, I quickly realized that I’d be selling myself short. The hard work that’s gone into building this venture makes it feel like an opportunity lost.
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Bringing in an Equity Partner: This seems like the most promising avenue. By partnering with someone who can take on the day-to-day responsibilities, I can maintain a strategic role while still being invested in the business. However, I need to figure out how to structure this partnership—like determining a fair buy-in price and establishing criteria for performance.
As I weigh these options, I genuinely welcome any insights or advice from experienced entrepreneurs who have navigated similar situations.
A Note on Partnerships
It’s important to clarify that I am not currently considering selling the business, despite the interest I’ve received. Should I ever explore that route, I would prefer to engage an agent to assist with the process.
For those interested in a partnership, please keep in mind that my side business is a B2B service. My approach to building this enterprise has relied heavily on my unique skills and experiences, which include:
- B2B Sales: Essential for growth and success.
- Business Operations: A critical aspect of running the day-to-day efficiently.
- Account Management: Strong project management and communication skills are a must.
- Marketing Skills: Proficiency in branding, copywriting, and content optimization would be beneficial, though not required.
- Technical Knowledge: Background in software development, web development, and UX/UI design is a bonus.
Additionally, I am based in the U.S. and would prefer a partner located in the U.S. or Canada.
I look forward to hearing thoughts from the community on how to proceed with this exciting new phase of my entrepreneurial journey. Thank you!
2 Comments
Congratulations on the success of your main venture! It’s fantastic to see your hard work paying off, and it’s great that your side business has also flourished. Given your situation, it’s clear you have some important decisions to make regarding your side business, which has reached a notable level of profitability. Here are several insights and practical steps you might consider as you move forward.
1. Evaluating Your Commitment
Before moving forward, take a moment to assess how much you genuinely want to stay involved in the side business. Do you see it as a long-term opportunity that aligns with your vision, or is it merely a burden given your primary venture’s demands? Your decision should reflect where you see the most value and personal fulfillment.
2. Choosing Between a Partner or Manager
Since selling is off the table, bringing on a partner or manager can be a smart move. If you lean towards a partnership model, consider these factors:
3. Structuring the Partnership
When considering how to structure a partnership or buy-in, here are some key points to keep in mind:
Valuation: Use a multiple of earnings or revenue to determine the business’s worth. Since your business did $60K in sales last year, you might look at industry standards for similar businesses to guide your valuation. Typically, small service businesses might sell for 1-3 times annual earnings, but this can vary.
Buy-in Structure: Create a clear agreement on the buy-in amount and any equity stake the partner will receive. Consider a phased equity vesting approach, where they earn more equity based on performance over time—this can be a motivator for maintaining satisfactory results.
Performance Metrics: Set clear KPIs (Key Performance Indicators) that your partner must meet to ensure accountability. This could include sales benchmarks, customer satisfaction ratings, or operational efficiencies. Regular performance reviews can help assess these metrics.
4. Legal Considerations
When formalizing any partnership agreement:
Draft a Comprehensive Agreement: Engage an attorney to draft a partnership agreement that covers the division of responsibilities, profit sharing, exit clauses, and more. This foundational document will protect both parties’ interests.
Intellectual Property: Since your skills and resources built the business, ensure that any IP (Intellectual Property) is clearly defined in the partnership agreement. This includes branding or proprietary processes you may contribute.
5. Transitioning Ownership
If you decide to move forward with a partner, plan a gradual transition. Introduce them to your clients, show them the ropes, and allow them to take over responsibilities over time. This process will give you peace of mind as your business continues to thrive under new leadership.
6. Future Considerations
Even as your primary business blossoms, monitor the side business for potential synergies. If there are ways in which both ventures can complement each other, that could create additional growth opportunities down the line. Also, consider setting aside a specific timeframe (e.g., six months to a year) to reassess the situation and make adjustments as necessary.
Taking on a partner rather than shutting down or selling your side business can open new opportunities for both you and your potential partner, so long as the structure is sound and clearly defined. Good luck with this exciting next chapter!
Congratulations on the success of your primary business! It’s inspiring to see how you’ve navigated your entrepreneurial journey thus far. As you weigh the future of your side business, consider a few additional avenues to explore.
**1. Assess Passive Income Opportunities:** If you decide to keep the side business but want to reduce your hands-on involvement, think about ways to automate or streamline operations. Can you create online courses or resources that can generate income with minimal intervention? This could provide ongoing revenue while freeing up your time for your main venture.
**2. Evaluate Your Unique Value Proposition:** Before bringing in an equity partner, take a moment to reflect on what makes your side business truly distinctive. Documenting your unique selling points can not only help in structuring a partnership but also serve as valuable marketing material. Clarity here could attract the right kind of partner who complements your strengths.
**3. Temporary Delegation:** You might also consider hiring a freelancer or a virtual assistant to handle some of the daily operations temporarily. This can provide you with more clarity on whether you genuinely want to keep the side business running or if it’s better to offload it entirely.
**4. Retain Decision-Making Control:** If you do bring on a partner, establish clear boundaries regarding decision-making. This ensures your vision remains intact while also allowing you to benefit from your partner’s expertise in areas where you might need support.
Ultimately, it’s about balancing your passions and aligning your decisions with both your current capabilities and future aspirations.