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Value Creation Blog

Do Business Owners Get Smarter At 50? – Enterprise Value

Posted by Josh Patrick

enterprise valueI’ve noticed a phenomenon over the past several years.  Business owners who turn fifty years old with mildly successful companies start becoming much more successful as they move further into their fifties.

The first few times I saw this, I thought is was just a coincidence.  As time has gone by I’ve changed my mind and now believe it happens for some very specific reasons.  Some of those reasons are:

Its just part of the learning curve.

Most businesses are started from scratch.  All business owners will make mistakes.  Those who learn from their mistakes and don’t make the same ones over and over eventually build businesses that create more value.  It often takes twenty years or more to learn enough lessons where your business starts to make a reasonable amount of money.

There is a lot of trial and error in running a business.

Building a business is often based on the trial and error method.  Business owners who look at what works and build on that will over time build businesses that are very successful.  They find that certain things they do are successful and find ways to magnify those successes.  As they do so, they find their businesses become more effective and efficient at what they do.

Longevity is important in a business.

For a business to last twenty years or longer, the business has had to go through several business cycles.  The owners have learned how to deal with both boom times and recessions.  A twenty-year business owner has likely been through at least two recessions and when new ones come down the pike, they not only aren’t spooked, they often find ways to take advantage of others weaknesses.

Owners have learned about systems.

As we get older, we often get more and more tired with day-to-day operations in our business.  The only way to get out of this bind is to start to systemize our business.  We often see that business owners over fifty may not have written down their systems, but they’ve trained others to do at least some of them.  Owners who have gone past the beginning stages often have businesses that are more successful than those who haven’t.

Business owners have learned to act strategically.

When a business owner systemizes their business, they create time for strategic actions within their business.  I find that the more strategically a business owner acts, the more successful they often become.  Again, this rarely happens until the owner has been in business for twenty years or more. (Meaning there are likely to be over 50 years old.)

What are your thoughts about people over fifty running more successful businesses than those under fifty?  Please email me at Jpatrick@stage2planning.com with your comments.

Josh Patrick

I’ve written a special report on the financial life of the private business owner.  I think you might find this interesting.  To get this report, please click on the button below to go to our signup page.

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Topics: for business owners, enterprise value

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