At the end of each year, my team and I go through our annual goal planning. My team will tell you I'm an ambitious, big ideas kind of guy, and I can get a bit carried away this time of year.
In the past, we’ve been very aggressive and put together a list of 25 to 30 things we wanted to accomplish. Of course, if we’d ever actually accomplished all those goals the business would be in a truly spectacular position.
Unfortunately, there’s this little thing called reality. We only have 24 hours in a day, and we have to spend a fair chunk of those sleeping. Then all our normal, daily workload comes into play, and most of those goal-list ideas get sidelined.
This year, I got more disciplined. We’re going to focus on two or three key areas where we see the lowest hanging fruit and biggest opportunities for growth. If we can continue to take care of our clients and accomplish those goals, our business will be much better off by year-end 2018.
I want to encourage other business owners out there to set a small, focused set of meaningful goals, but I also want you to stop and think like a business buyer. Talk to a consultant or meet with your board and choose an initiative that will better position your company for sale, even if that’s not in your plan for a while yet.
Over the years, we’ve talked with endless buyers and acquisition experts from large and small corporations, private equity firms, and family offices. And we’ve gotten a good understanding of what really moves the needle in their minds — what brings value and what doesn’t.
One of the biggest hot button issues for buyers is getting access to a proven management team. Having an experienced leadership group adds so much value when compared to a company that relies on the owner for key decisions and customer relationships.
For some businesses, I know this means hiring new leadership, and that’s a challenge in today’s talent market. For many, though, it could be as simple as coaching your team and giving the next generation more development opportunities.
Take time away from the business this year. Plan longer vacations, and really work at working yourself out of the business. It will make your business more salable and (by way of other strategic benefits) will better position your company for success should an emergency ever arise that makes you unable to lead.
After management issues, one of the other biggest limiting factors I see is the lack of a formal sales and marketing plan. We see it a lot: successful companies get complacent and they stop trying to develop new relationships.
Business owners tell me, “We get our leads through word of mouth. We don’t need a website. We already have our customer base.” I’ve heard variations on this message a hundred times.
Here’s the problem: more often than not, if you’re not growing, you’re going backwards.
Your competitors are evolving. What’s more, your customers are learning just how important they are to your business. Rely on them too much, and pretty soon the tail starts wagging the dog.
Buyers like long-term customer relationships, but they don’t like the risk that comes with customer concentration issues. (Anything over 20 percent will raise concerns.) Plus, telling buyers, “You just have to start marketing and the customers will come,” is not a growth strategy they appreciate.
I understand that selling more business often comes with new challenges in workflow and capacity. If you’re not prepared to manage that growth, consider selling or bringing on an ownership partner (via a partial sale) before you let growth stagnate. Businesses on a clear,upward trajectory are always more attractive than
those standing still. It’s a new year, and it’s time to make plans.
Before you build out a long list of goals, and before you tackle that pet project, figure out what a buyer wants most from a business like yours.
Even if you don’t plan to sell right now, it might make sense to focus your efforts on initiatives that will drive business value—not just business growth.
Scott Bushkie is principal of Cornerstone Business Services.