If you are like many business owners, you are still caught up in finishing the year strong but right now you should also be planning for the next year. Based on what we have seen in past years here are some thoughts on where you should be INVESTING. Note that a number of the ideas that are interdependent.
When John F Kennedy talked about putting a man on the moon he had no plan, only a vision. We all know that your vision needs to be backed up with a written strategy but in the beginning there has to be a vison for people to get behind. The Millennials particularly don’t always want to be given a road map, they want to develop their best route for getting there. So as a business owner you need to give them a vision which serves as their “Why”. As time evolves this vision may change and include an exit plan and this needs to be documented as well. We encourage you to start with the end in mind, whatever that looks like.
When you have a falling unemployment rate and increasing turnover, the immediate reaction of many business owners is to just throw more money at the problem. Unfortunately, this is addressing the outcome, not the source. People leave jobs because they are not aligned to the vision, values and behaviors of the business. Does everyone know your values and behaviors and is it documented? Many businesses have a set of values but they do not express them in behaviors and they certainly are not documented. Culture is an asset and should be treated as such.
Unfortunately, in many private companies we see financial naivety when it comes to financial planning and in particular cash management. Often business owners are working with the same systems and procedures that they started with and these systems have not kept up with the business. Many owners still don’t trust the cloud and we have advice on that – get over it. Technology is a lot cheaper and more reliable than humans, so invest (wisely) in technology that will make you more productive.
Like your financial infrastructure, other areas need to be upgraded as you grow. Some people are able to grow with the growth of the company, others will not because the skills needed are different. Up to around $17M, leadership teams tend to be more hands on but at this inflection point we find that companies start to become more corporatized, the focus is changing from a P&L business to building assets and that requires different capabilities. Do you have the right skills in the right jobs to take that next step?
Thinking of Selling – Be Prepared
Over the last 5 years, we met with numerous CEOs who are contemplating a business transition. Whether they are selling their company this year or in five years, one thing remains very clear – business owners need to be prepared in advance for this event. Whether they manage technology companies, retail businesses, professional service companies or branded manufacturing operations, CEOs need to be ready before going through the selling process. If you are planning to sell your business in the next 24 months, set time aside to get the business ready.