This time of year I like to take several days away from my day-to-day business, hide out somewhere cold but with a good fireplace and sort through the current opportunities and challenges of my business. I make it a point to seriously limit email and phones so I can think more clearly without the usual “noise” of day to day activity.
I’m always curious about how (or if) other business owners do the same and what approach they take to an annual review or plan. Please let me know your routine and your success with it.
Here’s my approach:
- I spend very little time comparing what I planned to do with what I actually did. This seems to be an exercise with little benefit. What I do is focused on what surprises I had last year and try to figure out if I could have done something so that the surprises weren’t surprises
- Next, I try to forecast areas of my business that could create surprises, both good and bad, this year. For example, I’ve spent some time on interest rates. Interest rates are low now but if they suddenly jumped up it could have a bad effect on my business. Is there anything I can do now to mitigate the effects if higher rates do materialize? I think so.
- Next, I look at changes in my industry during the last year to try to determine if our people need training or education in areas where the industry has gotten a little ahead of us. For this year, I’ll be doubling our efforts in SEO and social media…but we’ll need some help.
- Another area I look at is my personal productivity. Have I gotten sloppy anywhere, in what areas can I support our people better?
- Lastly, I try to focus on approaching opportunities and try to figure out if we can get ahead of the curve. There are huge advantages in all businesses to be first..but not to early. That’s a delicate balancing act.
Often small business buyers wonder about this. There is an all too frequent buyer attitude that says “If it is a good business they wouldn’t be willing to sell it to me!”
Here are some reasons we see business owner want to sell:
- Divorce of husband and wife owners
- Partnership disputes
- Owner health issues
- Kids don’t want the business and the owner has gotten to retirement age.
- The business has gotten bigger than the skills of the owner
- The business needs professional management
- The industry is changing faster than the owner wants to change (in this case the owner is always convinced the market is wrong and he is right).
- The business is totally debt free and the owner doesn’t want to take on debt to grow.
There are many other reasons that make sense to the seller, even if it doesn’t always make sense to the buyer. the tricky part is, because confidentiality is so important it takes some work to locate a good business to buy. Finding a good business for sale and buying it from a seller who has a good reason to sell could be a formula for success in a business acquisition.
In the spirit of the holidays I’ve decided to give small business owners a ready made, no assembly required, New Year’s resolution list. It’s only 5 items and it’s designed for every business owner.
Here’s your list………… yes that means you!
- Smile more – business life is never as bad as it seems when things aren’t going well. From a business perspective there is always a way out…always.
- Read more – I don’t care how long you’ve been in business nor how smart you think you are…you can learn something from someone else. I suggest that you read things that are not directly related to your industry. Skimming your trade journal every month to see who got fired is not real reading.
- Plan more – Set aside specific blocks of time, away from the office, where your only job is to think about your business 6 -12 months in the future. In spite of what you may believe, planning is not the same as updating a to do list.
- Say thank you more – to your spouse, your parents, your kids (yep, I said kids), to your customers, to your employees, to your vendors, etc. You get the idea, right?
- Wish less, Do more – I recently read (see #2 above) that the best productivity tool in the world is to do something. Makes sense to me, we can talk about doing something or we can actually do something. If we’re talking about doing something it’s still on the to do list, if we actually do it…by golly the list is shorter.
My New Year’s resolution (well, one of them anyway!) is to provide more tools for small business owners to start or buy a business, then grow it profitably and sell it! As part of that I am kicking off the New Year with a specific book recommendation. Although I can’t say I agree with everything in this book it is loaded with ideas that might help get you focused on creating a business that you run, instead of a business that runs you.
Making Money is Killing your Business contributes greatly to the argument that running a business by the seat of your pants is not always a great idea.
A core and unique concept of the author Chuck Blakeman is that a business should throw off money and time. If you start thinking about your business this way I think it will change some of your decision making. In an earlier post, ‘Tis the season… I warned about creating an atmosphere in your business where you are cynical about your business and you lean on an “it’s me against the world” view of ownership.
This book gives clear ideas and examples of how to mange that natural tendency.
Don’t get hung up in the references to a specific industry. Analyze the concepts and I think you’ll be able to apply improvements to your business quickly. Good luck and let me know what you think about the book.
- Cash flow – too many bills at the wrong time.
- Employees – too many need baby sitters, not bosses!
- Customers – Is perfection a reasonable expectation?
- Family – Why doesn’t my family appreciate me working 7 days a week? After all, I’m doing it for them.
- Stop feeling sorry for yourself.
- Stop using your business as an excuse for not doing the family things that you just don’t want to do. Helping your family hate your business is not a good plan.
- Start thinking about your cash flow problems before you have them instead of waiting until you have them.
- Give your employees written and detailed systems so they know what you expect and how to do it. Believe me, they’d rather not listen to your rants any more than you claim you don’t want to give your rants.
- Only promise your customers what you KNOW you can deliver… then do it. Most unhappy customers are created by you. Did you tell the customer what to expect? Did you deliver? Did your employees deliver (see #4 above)?