I’m often asked what a business is worth. I’ve gotten pretty good at giving you an estimate about how a buyer might look at your business.
Do you feel like you’re stuck in the movie Groundhog Day? You know, the same thing happens over and over. You feel like you’ve gotten past a problem and then a year or two later the exact same problem comes back again. You thought you solved it last time. You didn’t, it just appeared again and you’re afraid that it’s going to continue like this forever.
You need to stop being tactical.
Do you have the ability to think about tomorrow? I’m not referring to what you’re going to eat or what you’re going to do. I’m talking about what your business will look like and whether it will continue to be viable.
Let me tell you my story.
I’m not a fan of taxes anymore than the next person. At the same time, I really dislike being irresponsible in how we deal with our national finances.
We have a fiscal problem in this country. Our problem came as a result of having two wars start at the same time we did very large tax cuts. In fact, it was the first time in our countries history that we not only started down the road of wars; we decided not to even try to pay for them.
I love the concept of scenario planning. At the same time I hate the idea of budgeting. I just find budgeting drudgery that I do on an annual basis. Sometimes my budget is accurate, but more often than not my budget ends up having little in common with what my actual year ends up being.
I spend a lot of time sitting in meetings where strategic planning is the conversation topic. Almost every single of these meetings ends up having a laundry list of items that should be done. The owner of the company wants to have everyone participate in making the company better. Everyone gets a list of several items that are on their plate.
I occasionally get phone calls from people who have businesses in trouble. They are calling to get my help to “fix” their problems. I usually stay away from these engagements because the problem is the owner of the company and I’ve not found a way of fixing owners. I find there are often similar things that are true when a company is in trouble.
The business doesn’t have a business model that creates cash. Small companies all run on cash. Owners often don’t understand that without cash their company won’t run. At least they don’t understand this until it’s too late.
I speak with many business owners. Sometimes they are ecstatic because they’re getting better performance than they expected. On other times they’re depressed because their performance is less than expected. Most of the time neither of these emotions is justified. In our coaching relationships we find elation and depression based on metrics are unjustified.
We all have variance in the processes in our business. Sometimes the variances are better and other times they’re worse. These differences have nothing to do with your people. The variances do have a lot to do with being in statistical control of processes in your business.