Planning to Exit Your Business?

We all will exit our business at some point. If you are intentional about getting your business ready for sale or succession, here are a few questions and a major activity for you.

Start by working towards taking off three consecutive weeks. This means zero activity with the business. No phone, email, nothing. In doing this, you will be able to see how well your team does without you.

• Can they run the business day today?

• How about long-term?

• Can they take the business to the next level? The last question is entirely different as many leadership teams can run the company operationally but may not have the vision and/or experience to grow the company.

Can you take off three weeks? If not, what do you need to do to get there?

The next steps will be to think in terms of a six-month time frame and that your business is in better shape when you return. This adds significant value to the business because we know that businesses which are not dependent on their owner trade for significantly higher multiples of earnings than businesses who are dependent on them.  Achieving the goal of a six-months absence takes significant planning and taking advice from an external perspective.


Where Great Ideas Come From

The Wall Street Journal published a story in their Small Business Report titled How to Come Up With a Great Idea. There is no cookbook formula to this, however, the writer took an interesting approach in asking prominent business experts & entrepreneurs where inspiration comes from. Here are some of the ideas that jumped out:

  • If you think you’re too old to start a business, twice as many successful entrepreneurs are aged over 50 as under 25, and twice as many over 60 than under 20.
  • Make a note whenever you encounter a service of a customer experience that frustrates you. As one of the experts commented, ask yourself if there’s a better way.
  • There were many comments about seeking inspiration from indirect sources. Follow the arts, research other industries and talk to people you would not normally approach.
  • Find an idea to make the world a better place.  Think big.
  • Listen to customers & to front-line employees.
  • One of my favourites is to pay attention to history. Folks in the 1950s & 60s went overboard with instant coffee and TV dinners. Starbucks & Whole Foods looked back to a better experience. And it may not be profitable, but I’d love to have a domestic flying experience where I didn’t feel like one of the cattle.
  • And to add one of my own ideas to this, look to your data. As I wrote in an earlier blog, there’s gold in Big Data. 

Hopefully, your idea will work out successfully. But if it doesn’t, as Andy Rachleff of Stanford advises: Make sure you can fail fast and cheaply.

Of course, the idea is only part of the mix. As Thomas Edison said, genius is 1% inspiration and 99% perspiration. Nobel Prize-winning economist Daniel Kahneman, author of Thinking, Fast and Slow would probably modify that to something like “success is 1/3 inspiration, 1/3 perspiration, and 1/3 Good Luck. In Thinking, Fast and Slow, Kahnenam, a psychologist who specialises in decision making and behavioural economics, utilises probability extensively in his research. He concludes there is just too much evidence to indicate that plain old luck has a great deal to do with success.

The WSJ also ran an online survey on what entrepreneurs do differently. They concluded that entrepreneurs agree with the following statements more than everyone else.

  • If I have to stop pursuing a goal in my life, I find it difficult stop trying to achieve it; I can’t let it go.
  • Past failure in entrepreneurial endeavours increases the chance that a new business will succeed. 

Entrepreneurs are a tenacious and optimistic lot.


Are You Choosing Chores?

Anson Thompson

Think about the time you wish you had to spend time with your kids (or your spouse, or even yourself). Do you wish you could attend their events, play with them and enjoy time doing fun things? Many of us are busy enough at work as it is. If we are also doing work on our home—painting, mowing or other chores which could be done by others—you are spending time away from doing things you wish you could do with loved ones.

What is that time worth? It’s likely more valuable than what your own hourly rate is. Ask yourself if it makes more sense or is justifiable to pay someone else to perform chores so that you can do the family things you want. If it makes sense to outsource these tasks, do so without guilt. Remember, we won’t be on our deathbed wishing we had mowed the lawn more often!


Build Your Unique Value

Art Miller

The long-term implications of selling on the basis of price is that you will likely lose your customers to a “dirty price cutter.” You must provide value in another area; price cannot be the primary value for customers. There is only one exception to this rule, and that is if you happen to be the low-cost producer of a good or service. Even then, price competition can destroy a market over time. Determine another way to be of value to your customers and then strive to be the best in the world in that area.


Goals – be aware of downsides

Conventional wisdom is that having goals is the key to success and that the SMARTer (Specific, Measurable, Achievable, Relevant and Time bound) the goals are the better.  But there is an alternative view, supported by research, which suggests that there can be negative consequences from having goals.

1. Goals can be limiting if interpreted by those responsible for their achievement as being a boundary or a limit. Once the goal is achieved there can be a tendency to sit back and admire the achievement rather than striving to achieve greater things !

2. Goals tend to be static. They are fixed for a period of time and may not be reviewed in a timely fashion when circumstances change.

3. Goals can cause stress for certain personality types (or everybody!) and this reduces employees ability to perform on the job. Not everybody is motivated by goals.

4.  Goals can constrain creativity. If an organisation is fixated by the achievement of goals it may miss greater opportunities.

5. Goals can have unintended consequences. A constant challenge for sales organisations is achieving hard € sales targets while at the same time not compromising softer objectives such as the need to perform as a team and the maintenance of customer relationships.

6. Goals can be set too soon, before there is a picture of what success looks like. In the early stages of a business, in particular,  it may be better to focus on developing a sense of purpose and a vision rather than set specific goals before enough is known about the market opportunity.

7. Goals can undermine management credibility if viewed by staff as unachievable or just part of an annual tick box exercise. This will also be the case if there is no monitoring of progress towards achievement of goals.

8. Achievement of goals can lead to a sense of complacency that all it well in the camp, when there are fundamental issues beneath the surface that are not being picked up by the organisations goals.

It is the time of year when businesses are involved in planning for 2015, out of which goals for the year, will naturally emerge, hence this blog.

I am not suggesting that there should be no organisational or individual goals, rather that there should be an awareness of potential downsides in the goal setting process, which should inform how goals are positioned in the organisation. Not every initiative should have a specific goal – alignment with the company vision may be enough.  Remember goals are no more than a tool to realise the company vision and not an end in themselves.