HUL’s recent acquisition of Minimalist, the Indian skincare brand celebrated for its science-backed and transparent approach, offers valuable lessons for small businesses and aspiring entrepreneurs. Let’s break down the key takeaways from this landmark deal and how you can apply them to your own business journey.
1. The Importance of an Exit Strategy
An exit strategy is a plan for how you, as a business owner, intend to monetize or transition out of your business eventually.
Why is this important?
An exit strategy helps you:
- Stay focused on long-term goals.
- Make decisions that enhance your business’s marketability.
- Attract investors who see a clear path to returns.
Even if you’re not planning to sell your business, having an exit strategy ensures you’re building something sustainable, scalable, and valuable. Ask yourself: Am I building a business that can thrive without me?
2. Innovation Doesn’t Mean Reinventing the Wheel
Minimalist’s business model drew inspiration from The Ordinary, a globally successful skincare brand known for its no-frills, science-backed products. Instead of trying to invent something entirely new, Minimalist contextualized this concept for the Indian market. They adjusted pricing, formulations, and marketing strategies to align with local consumer preferences.
This principle ties back to the idea of ‘remixing,’ which we discussed during our 5-day challenge to test business ideas (Click here to check it out). Remixing means taking a proven concept and tailoring it to a new market or audience. It’s not about copying—it’s about adapting.
Lesson for small businesses: Look for successful models in your industry and think about how you can customize them to meet the needs of your target market. Innovation doesn’t always mean creating something entirely new—sometimes, it’s about making something familiar more relevant.
3. Valuation Is Not Just for Startups
A common misconception is that valuation is only relevant for ‘startups’. Minimalist’s acquisition by HUL highlights why small and medium enterprises (SMEs) should also focus on valuation alongside profitability.
What is valuation?
Valuation is the process of determining the worth of your business, often based on factors like revenue, growth potential, and brand strength. For Minimalist, their transparent branding, customer loyalty, and scalability made them highly attractive to HUL—even more so than just their revenue numbers.
Why SMEs should focus on valuation:
- A higher valuation can help attract better investors and partners.
- It gives you leverage during mergers, acquisitions, or fundraising.
- It encourages you to invest in assets like branding, processes, and intellectual property that enhance long-term value.
- It’s the ultimate payout for a business owner. After all, your company’s PAT isn’t money in your pocket. You are still an employee of the company drawing a salary till you eventually sell your ownership.
Profitability is important, but it’s only part of the equation. Think about what makes your business valuable beyond just your bottom line—your brand, customer base, and potential for growth.
Final Thoughts
I am a third-generation family business owner, and I independently run one of our family companies. I am not suggesting that one must sell their stake in a business to succeed. By all means, some may argue that building a multi-generational business is the ultimate definition of success. All I’m saying is: build a business with intent. Valuation is like having any other asset—you may choose to sell it or continue to grow it!
What’s your biggest takeaway from Minimalist’s journey? Share your thoughts in the comments below!
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