The Time Thief
Business Concern
We have all been there. Rearranging the deck chairs on the Titanic. There was always an unspoken vision – never written but certainly desired. But things got in the way. The problem was that so many issues came up. There was never a quiet period when things could be thought out. There was never enough time to do it right. Then there was no time at all, and what we were doing was too little too late. How many business owners have you been aware of who have never derived full value out of their business? Some owners could not realize their business dreams because of a health issue or burning...
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Delegate – Unlock the Maximum Value of Your Business
Business Concern
Owners of small to medium sized businesses often find it hard to delegate management tasks. This is especially true of founders of the business. Here is a critical truth: to the extent you are engaged in management of the business, you are decreasing the value a buyer will pay for the business. A buyer wants a business that runs itself, not one that depends entirely on you and other owners. Full delegation of management responsibilities is not just a way to reduce your stress; it's part of Prior Diligence, a strategic move to unlock the maximum value of your business through a successful sale....
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The Risks of Not Implementing an Owner Agreement
Business Concern
Owners of small to medium sized businesses want to realize the maximum value for their business interests. There are many risks preventing realizing maximum value for a business interest – most can be avoided by the implementation of an owner agreement. Where an owner does not hold a controlling interest, there is the risk that the owner will not have control over the outcome of certain business transactions that may diminish or terminate the owner’s interest. There is an increased risk of misunderstandings and conflicts. Where there is no written owner agreement, there are no defined...
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Lightning
Business Concern
I like to walk my dog, but the other day when the time came, I decided not to. The disappointing reason was that when I looked outside, I could see lightning and hear thunder. At the same time, I saw my neighbor outside walking his dog and looking very unconcerned. I later learned that during the storm lightning caused a fire in a house near ours. I did not regret my decision not to go outside, but I do not think my neighbor regretted his (he was unscathed by lightning, and his dog was able to go on schedule). We all have levels of awareness when we are more aware of foreseeable, adverse...
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Business Failure
Business Concern
One in four private sector U.S. businesses fail within their first year of operation. After five years, almost half (48%) have failed. After ten years, the failure rate is 65.3%. (According to data from the U.S. Bureau of Labor Statistics.) Generally, businesses fail when they run out of cash. Cash flow is a metric indicating how money is coming in and being spent in a business. Marketing decisions influence how much cash comes into the business. Operations and growth decisions control how the money is spent. Good decisions made about cash flow will prevent business failure. Small to medium...
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Discovering the Owner Agreement for Your Business
Business Concern
Where there is a small or medium sized business with more than one owner, there is an owner agreement. It may not be obvious – in most cases it is not written. But for any multi-owner business the owner agreement must be there for the business to function. To start a business there must be agreement about the business entity to use, the initial capital, the basic governance, and the operational functioning of the business. In various documents regarding these matters there will be writing documenting the decisions made by the owners, but most owners do not document the basic strategy that...
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Where to Find Help
Business Concern
As the owner of a small to medium size business, you may have felt the need to ask for help but not felt comfortable doing so. Owners of businesses are often skilled in the business they own and enjoy the respect of their family and friends. If their businesses are successful (profitable), it is usually based on their leadership and good fortune. But things change and sometimes the successful are faced with difficulties and even poor results. The humility it takes for an owner to recognize that business is a team effort and that the policy-making group of a business needs help is a principal...
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Creation of Wealth for Business Owners
Business Concern
Among the common goals of members of a capitalistic economy is the creation of wealth. This is often a reason why people own businesses. For an individual, the concept of wealth creation is the escape from dependence on earning funds for current expenses to live a certain lifestyle to building up assets and resources that appreciate over time and are of a magnitude to sustain that lifestyle or a better lifestyle without the need to earn funds for current expenses. Creation of wealth is a reference to accomplishing financial independence through the creation of passive income from investments....
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When Planning Becomes Dynamic
Business Concern
Traditional planning is static. If there is a written plan, we see the plan formulated, documented in writing, presented at a meeting, and then put on the shelf to be consulted for next year’s retreat. This is the opposite of a forceful and changing dynamic plan. A dynamic plan can accomplish continuous improvement in business performance over time resulting in increased profitability. How does a static plan become dynamic? The answer is in the format of the plan. To be forceful a plan must be understood and implemented at all levels of the business – operational as well as management. The...
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The Concept of Time – How Its Progression Affects Important Tasks
Business Concern
The Concept of Time – How Its Progression Affects Important Tasks Time is the progression of events from the past to the present into the future. Time marches forward relentlessly. From birth to death, we age, and every moment that passes is unique and unrepeatable. The more important tasks we accomplish within our lifespan, the more fulfilling and impactful our lives can be. But what defines "important"? Is it happiness? Recognition? Pursuing a passion? How we define, or not define, “important” has a great deal to do with how we spend the time of our life span. I believe in defining...
info_outlineMost businesses are founded on assumptions. Founders with a common purpose initiate the business, and, upon its profitability, assume that all owners share the same goals and interests. What do you know about your co-owner’s plans for the business? Have you simply assumed that all of the other owners have the same interests and desires? What if this assumption is incorrect? When the assumption that all owners want the same thing proves to be wrong, there is inevitable conflict. To prevent this conflict, owners need to communicate about their values with respect to the business and develop strategic plans which honor those values. The understanding between owners should rest on conversations and not assumptions. Those conversations need to be about values with respect to the business.
A value is a normative principle that informs and shapes thoughts, desires, feelings, choices, and behavior. A value is not a preference, but an enduring and essential attribute of character. Most owners are only vaguely aware of the standards and concerns that compose their personal value systems. Most unthinkingly embrace an array of normative standards to which they assume most caring and intelligent people adhere. To bring clarity and order to the owner’s personal value system, the owner should reflect on the circumstances and experiences that have informed and shaped the owner’s hopes, fears, and perspectives. The product of this reflection should be memorialized in writing. The writing should be reviewed and altered from time to time to reflect changing circumstances and perspectives. In addition to not thinking about their personal values, most owners have given little thought as to how the business they own fits with those values. Few owners have consciously attempted to resolve the tension that inevitably arises when their personal values conflict with the conduct of the business.
The owners as a group provide the strategic planning for the business. Each owner should understand his or her value system and be able to bring an articulation of that value system into conversations regarding the conduct and ownership of the business. The discussion about owner values should establish the goals for the business. Owners will not all have the same values, and the goals for the business will have to respect those differences. When that is not the case, the discussion should turn to how can the owners go forward given the differences in values. While this may result in a separation of interests involving a change in the business, it will avoid a conflict or dispute involving a traumatic event and damage to the business interests of the owners.
Where there is no dialogue about values, realistic goals not set, and strategic planning not done, then when initial assumptions are found to be inaccurate, emotional responses will create an environment of conflict between the owners and traumatic disruption for the business.
To begin to have a dialogue with co-owners about value, ask all owners to reflect on the circumstances and experiences that have informed and shaped the owner’s hopes, fears, and perspectives. Create opportunities for the owners to articulate their value to one another. Based on those discussions, focus on the goals for the business such that those goals fit with the values of the owners. If you need help implementing this agreement among the owners, visit https://btcllc.net/shop.