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Value Creation Blog

Should You Concentrate On What, Why Or How? - Wealth

Posted by Josh Patrick

magnifying glassIt depends on where you are in your process.  I was recently talking with someone about doing an acquisition in their business.  Initially the conversation was around how she should go about buying the business she was looking at.

During the conversation I asked why she wanted to buy the business.  She said, “I need to get my total assets under management to be over 100 million dollars.”  That one statement changed everything.  Instead of concentrating on how to buy the business we needed to go back and look at what the best avenues were for getting to 100 million dollars under management.

Understanding what you’re trying to do is usually where you start.  In the case above the what really isn’t buying the business.  That’s one of the how’s.  The what should be what is the most efficient way to grow my assets under management to 100 million dollars.

In my opinion, the real question here isn’t whether to buy the business, but whether she’s committed to growing her assets under management.  If the answer is yes, then we should start putting together an analysis of what is the least expensive and best way for her to get there.

If the answer is through an acquisition, then a program needs to be put together to make an acquisition that works for her.  This means, we shouldn’t only look at the one company she’s trying to buy.  We should look at many companies.

Where does why fit in here?  Why give us the reasons we do the things we do.  In this particular case the why is once you get to 100 hundred million in assets, vendors treat you differently and you get better deals.  I certainly understand this and she has a very good why for going forward in adding assets to her business.

Why will often give us the impetus to move forward with difficult activities.  (and all activities with pursuing often hit roadblocks.)  When the going gets tough as it likely is to do in this project, we can always look back at the why and ask ourselves if the reason we’re taking the actions we’re taking is worth the effort?

If the answer is yes, we should go forward.  If the answer is no, then we either need to develop a different why or find a better way to spend our time.

What are your thoughts about where to put your concentration?  How often do you ask yourself the tough what question that is followed up with a why?  I often find the first thing I think I want to do is really how to do something, not what to do.  How about you?

Josh Patrick

I’ve recently put together a mind map of the wealth management process for private business owners.  To get a copy of this mind map please click on the button below.  You’ll be taken to our signup page where you can download the map.

click-here-for-mind-map

 

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Topics: asset management, mission vision values and goals, Strategic Thought

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