Residual value

If, like me, you are trying to start a business, think about its residual value, in other words, what will remain if everything goes wrong?

My last business was a small boutique consulting firm where, with a small team, I basically sold my expertise and energy. It did well but once I decided to stop, nothing was left. That was fine because consulting pays in cash rather than equity; however it is not what true entrepreneurs typically look for.

So, back to the subject in the title, how do you know if your business will have residual value? In truth, you can never be 100% sure however, you should think about which capabilities created in your business are unique or hard to replicate and respond to a market need that is expected to be here for a long time. This will sound to many as an evidence… too often when looking at other people’s business plan.