There’s a really key difference we often see within the children’s activity sector. Some providers have a self-employed job, whereas others are actively building a small business.
There’s not necesarrily anything wrong with either approach but it’s really important you know the difference if you have plans to create something bigger than just ‘YOU’.
The main difference being whether you ‘are the business’ or whether you ‘run the business’.
Forming good habits alongside developing systems and processes can really help in this regard. Working ‘on’ the business and not ‘in’ the business is essential and something to work towards if not already in this position.
A typical path for many children’s activity providers is:
1. Get really skilled in a job as a teacher, educator, coach, entertainer etc
2. Decide they’d like to work for themselves using their skills and have more freedom/earning potential
3. Take the plunge, start up as self-employed and start running their own business
It’s a well trodden path to operating in our sector. There’s very low barriers to entry, which is why we see so many people start up. It has strong appeal for a multitude of reasons.
But have you ever considered your exit strategy?
An exit strategy typically means the point at which you intend to stop running the business. This might be selling your business or passing it onto your children. The really good thing about having an exit strategy isn’t necessarily the big pay-off people think about, moreover it’s the fact you’ll likely be thinking ahead to ways you can improve the business, systemise, add and create value before you depart. This often leads to a much healthier and successful business where returns are more guaranteed than those just operating by themselves with little regard for the future.
If you’ve never given much thought to your exit strategy you’re not alone. We’d estimate up to 90% of activity providers haven’t either.
However, if you plan to maximise the commercial value of your business both as a current income source and future sale it really is something to sit down and think about.
When you only see your business as a job for regular income, you probably won’t invest as much as you need to develop its full potential. It will likely mean you see every outgoing as an expense eating into your pay rather than an investment into your business. For example, people see marketing as an expense, and while you might mark it down as such for tax reasons, it really should be seen more as an investment to your ongoing brand awareness and advertising needs. Other examples include, investing in new equipment, joining a sector association, developing a new website, up skilling yourself in business areas or seeking expert advice. We tend to see these as savvy investments in developing your business.
Things that might add value to your business include:
- a unique and tailored programme offering
- a trademark and intellectual property protection
- staff training programmes
- staff themselves
- a bespoke booking system (if bespoke is too costly, a strong off the shelf solution)
- marketing materials and brand guidelines
- systems and processes
- a large email list
- a modern efficient website
- strong website traffic
- social media pages and engaged audiences
- content marketing/blog articles
- quality equipment
- a franchise network
- additional revenue streams and products
You can probably think of other areas of value too.
A dirty word?
We’ve come to associate the world ‘money’ or ‘sales’ as dirty words. Our sector is even more guilty of this as for some reason because we work with children, the perception seems to be we shouldn’t be as financially driven as other sectors. If you’ve ever fallen into the trap of thinking like this (even subconsciously) then time to get out of it. The value activity providers bring to society is proven and like any business, your service offerings are a value exchange.
We should all be fully looking to maximise the value we give (our services) and the value we receive (money).
This isn’t to dismiss other reasons for operating a business (there are many), but it is to highlight the need to ensure you get paid what you deserve and there’s nothing wrong with planning ahead for when you want to step back as this will allow you to develop systems and processes for the business to run without you actively involved. Done well, this leads to more autonomy, more freedom and a more valuable asset.
Wishing everyone the best of luck as the sector reopens over the coming weeks with face-to-face services once again.