3 Business No-Nos: Avoid These Common Mistakes for Long Term Success

Who is Sandy MacKay?

I help Canadians build wealth through real estate and expand their freedom. I am obsessed with finding ways to live a life by design, rather than by default.

Starting a business is easy. It doesn’t matter what industry you’re in. It is simple to start any business.

Building a sustainable business though. Not so easy.

And exiting a business, well now we’re entering unicorn territory.

86% of businesses never sell.

Stats Canada also tells us that 20% of businesses fail within year 1, and 60% fail in their first 3 years. The stats in the US show a much lower success rate.

You could start 100s of businesses in 2023 if you wanted to. Anyone could. For under $1000 you can get all the registration paperwork done, bank accounts opened and business cards made. You’d even have money leftover to create a very simple website.

Then you’d change up your bio on your social media profiles and everyone would congratulate you on your new endeavour. 🥳

You’d have no customers yet, but you’d be “launched”.

Next you’d have to find some customers. Again, this is not too difficult.

If your business is operating in Canada then you’re extremely lucky. There are plenty of people with extra discretionary income to spend.

If your business involves real estate then thats another bonus. Most Canadians believe that real estate is a great asset.

Most foreigners even believe that Canadian real estate is some of most valuable in the world.

There are lots of customers out there. Customer acquisition will require 10x more prospecting and marketing than you expect. But thankfully, its not rocket science. It’s more like elementary school math. You just have to put in the work.

Once you have customers, the real challenges start to show up. Inevitably you run into challenges with customers, vendors, employees, partners etc.

Even when you make it through those initial challenges, you aren’t home free yet.

You have to help the business make a safe landing. A safe landing means it has consistency in 3 main areas:

1. Systems
2. People
3. Tools

Of course finding consistency in these 3 areas and making a safe landing is much easier said than done. It is complex.

Although most entrepreneurs are making it way more complex than necessary.

Let’s Highlight 3 common mistakes that lead to weak systems, weak people and weak tools. 

Mistake #1: Leading with Creativity

Instead of finding the best model out there and replicating it, most entrepreneurs want to be creative.

Leading with creativity has been one of my biggest errors in my business career.

Creativity is unnecessary.

It’s not bad. It’s eventually very valuable. It’s just completely unnecessary early on.

Early on when you’re thinking of starting a business (or starting anything new in your life) you basically have 2 options to work with:

1. Find a great model. Follow the model. Guarantee yourself success. 💪
2. Create a new model. Test the model yourself. Make success a wildcard. 🤷

You get to choose your path.

I’ve done both.

Every time I’ve chosen path 1 its equalled money, joy, and fulfillment.

When I’ve chosen path 2 the results have been mixed. But it’s always been stressful and difficult. And anytime I’ve lost big, it’s been because I chose path 2.

Thankfully for realtors, path 1 has been written, tested and proven over and over again.

I’ve recently been diving back into The Millionaire Real Estate Agent book by Gary Keller. (If you’re a realtor who hasn’t read this multiple times, please read it again. Study it over and over)

As much success as I’ve had in my realtor business, that book is still a bit painful to read. My forehead hurts from me banging my palm against it.

Follow the Millionaire Real Estate Agent model verbatim and you’ll be netting a million dollars in your real estate business in 8 years or less.

Add in a few extra hours each week, and you can get there in under 5 years.

By following a proven model, it frees you up to do your best thinking.

And your best thinking leads to your best creative ideas.

So don’t worry, you will be able to add on your very best ideas after you’ve nailed the launch and the landing. And notice I said your best creative ideas, not your most creative ideas.

Not all creative ideas are good ideas.

Ever wonder why you seem to come up with your best ideas when you’re doing things like… taking a shower, or sitting on the toilet?!

There’s a lot of science behind that and it’s a story for another letter. But basically, its because you’re following a model that you’ve done 100s of times before. Your brain isn’t telling you what to do, you’re just doing it. Thus, your brain is freed up to be fully creative.

Mistake #2: Not Beginning with the End in Mind

Launching a business = easy

Landing a business = complex

Exiting a business = hard

This is the reality for most businesses because they’re missing their end goal. They’re missing exit strategies.

Exit strategies should be one of the first considerations for any new business.

Building a sustainable business can eventually lead to exit strategies. But if you’ve never thought about your exit strategies before, then do you really think the optimal exit strategy is going to appear out of nowhere?

It won’t. An exit strategy may appear, but it won’t be the optimal one.

Instead the exit strategy that comes your way is more likely to be the savvy investor who’s looking for a deal. Or it could be the average team member who you reluctantly hand the business over to because you couldn’t attract and retain better talent.

This is why selling a small business is so difficult for people.

It’s why 86% of businesses never sell.

I’ve “flipped” a bunch of properties over the years. Meaning I’ve bought ugly houses and added value through renovations. When you buy a property, you are basically starting a new business. The property is the business.

Sometimes I flipped them to sell, and more often I flipped them into buy and hold properties. In other words, I “flipped them to myself”, placed tenants and held the property.

When renovating a property to sell to the public, you have to consider who your end buyer is and what that buyer wants.

Will the ideal buyer be single, a couple or a large family?
Will the ideal buyer have kids or pets?
Will they pay more for hardwood floors over laminate?
Where would they prefer the laundry room be?
Do they need a powder room on the main floor?

When renovating to rent and hold the questions are a bit different.

Will a tenant need laundry?
Will a tenant pay more for a parking spot?
Will the basement make more sense as another unit, or as a storage space?

When you ask these questions before you start the project, you will have a much better result. You’ll be proactively considering your exit strategies, and tailoring your renovations to attract your ideal buyer or tenant.

When setting up your business you should be thinking similarly.

You should be thinking about your exit strategies from the very beginning.

When you think proactively about your exit strategies, and you land a business safely, you end up with a highly sellable business.

It’s highly sellable because you personally are no longer needed to help the business grow and generate cashflow. Moreover, you’ve built it to suit the perfect buyer.

Mistake #3: Not Being Proactive

When you have exit strategies for your business. It leads to a more proactive business in every way. It helps you cast your vision and show where the landing strip is.

This means the systems, people and tools all become more proactive.

With this mindset in place, eventually the systems, people and tools can do all the work for you.

When the systems, people and tools are doing the work for you, it frees you up to grow further personally and bring that growth back into the business.

This makes for a lucrative and fun business where your systems, people and tools are all growing together with you.

Conversely, no exit strategy leads to reactive systems, people and tools.

Reactive systems, people or tools leads to never “landing” the business smoothly.

Never landing the business smoothly leads to pain and exhaustion.
Both proactive and reactive cultures are contagious. You must inspect this every day.

Operators vs Owners

Honestly, I never thought of exit strategies when I got into the realtor business. 🤦

It has lead to pain. I’ve restarted things over again far too may times, because I’ve not had proactive exit strategies. 

When you decide it’s time to exit your business, you end up with lots of free time. Now you can go start another business if you so choose, and build more value for the world, and for yourself.

This is what makes you a true business owner, instead of a business operator.

Business operators get tired. Business owners get rich. Multi-Business owners get wealthy.

Moving from Operator to Owner & Beyond

Exiting doesn’t need to mean selling 100% of the business by the way. It doesn’t even need to mean selling 1% of the business. There are 1000s of different exit strategies that are possible.

“To begin with the end in mind means to start with a clear understanding of your destination. It means to know where you’re going so that you better understand where you are now and so that the steps you take are always in the right direction.”
– Stephen Covey

Stephen Covey wrote the book 7 Habits of Highly Effective People.

Habits #1 and #2 will look familiar to you now:

1. Be proactive.
2. Begin with the end in mind.

Here are the other habits he recommends:

3. Put first things first.
4. Think win/win
5. Seek first to understand, then to be understood
6. Synergize.
7. Sharpen the saw.

Hope you enjoyed this one. Have a great week!

– Sandy MacKay