Business Concern

Business Concern

Something bad and unexpected happens. It is upsetting. Anxiety takes over. The adrenaline response is to do something, anything, right now to stop the bleeding. Soldiers and emergency medicine physicians train for exactly this moment, and they train against the adrenaline reflex response. Reacting quickly without a decision-making process usually means doing the wrong thing quickly. The discipline: slow is smooth, smooth is fast. Slow down to a decision-making process. That process produces a good decision (smooth). A good decision, made without panic, executes faster and more effectively...

Business Concern

Why Owner-Centered Businesses Sell for Less Successful businesses are not successful solely because of the owners. In my experience, successful businesses have established a culture of performance standards and effective decision-making that enables success. So, is it appropriate for an owner to view a business that the owner has founded and guided to success as a legacy to the owner? My argument would be that a more appropriate legacy would be the wealth derived from the business rather than the business itself. The more the business is about an owner, the less it is worth to a prospective...

Business Concern

The three ways business owners lose the value of their businesses are conflict with co-owners, the loss of a critical owner, and failure to prepare for sale. Owners reading this might be surprised to learn that the threats are preventable.

Business Concern

  To ask that every performance be better than the last is to place tremendous pressure on the performer. The aspect of performance is at the heart of most endeavors. Intuitively, we know that performance is not a constant, but in a competitive situation, the goal is for it to improve over a set period of time. It is not enough to ask for consistent effort. When we watch athletic performers, we see that champions have more than just consistent effort; they improve through sound decisions about innovative techniques, effective training, better equipment, and better mental preparation. In...

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...

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....

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...

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...

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...

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...