Sellability: Is this a goal for your company?

Imagine that your first-born graduates from college and as a gift you give him your prized 1967 Shelby Ford Mustang. Your heavily indebted child takes it on the road, but after a few miles, the engine starts smoking. The mechanic takes one look under the hood and declares that the engine needs a rebuild.

You thought you were giving your child an incredible asset, but instead it’s an expensive liability he can’t afford to keep, and nor can he sell it without feeling guilty.

You may be planning to pass your business on to your kids or let your young managers buy into your company over time. These are both admirable exit options, but if your business is too dependent on you, and it hasn’t been tuned up to run without you, you may be passing along a jalopy.

The sellability of your company is a gift and is just one of the four reasons why building a sellable business should be your most important goal, regardless of when you plan to push the eject button.  It should also be a hidden goal.

If you’re like most owners, you have a profit goal you want to hit. You may also have a top-line revenue number that’s important to you. While those goals are important, there is another objective that may have an even bigger payoff: building a sellable business.

But what if you don’t want to sell? That’s irrelevant. Here are the other three reasons why building a sellable business should be your most important goal, regardless of when you plan to push the eject button:

  1. Freedom.
  2. Fun.
  3. Financial freedom.

Freedom goes back to the “you-proofing” concept.  Making your company less dependent on you means that you actually have an enterprise that stands alone and gives you the freedom to step away or look at it differently.

Running a business should be fun–thinking and acting strategically, solving problems for your clients and customers and working on your business rather than in your business.  Passing on the drudgery of your business to someone else in your organization is part of making your company sellable.

By creating a sellable business, you shape and mold your enterprise into something that is not unlike a financial portfolio.  It is an asset working  for you rather than you working for it.

Keep in mind these things take time.  but patience and persistence and doing the work are all a part of successful business. Remember, it is a goal.

Blessings.

Dave

Is Your Company “You Proof?”

We’ve all had a client or prospect “disappear”on us on occasion. Happens all the time and it sends us into all kinds of internal scenarios trying to figure out what happened.

I couldn’t reach a new contact recently and began to wonder what happened to him. Maybe he was no longer interested in what we had been discussing. Maybe something was going on in his business that had changed his priorities.

Well, you get the point. When a client or prospect drops off the world, you begin to wonder what happened and what you can do to pick things back up.

Then, after two weeks, I get a call from him apologizing for being out of communication since he had been on a two-week fishing excursion with his buddies. He quickly moved from a worry to being a hero.

Question: “Can you go fishing for two weeks? Maybe take your family on a two week vacation?” If not, why not?

“You-proofing” your business has enormous benefits. It will allow you to create a company and have a life. Your business will be free to scale up because it is no longer dependent on you, its bottleneck. Best of all, it will be worth a lot more to a buyer whenever you are ready to sell. With that thought in mind, here are a five ways to get your business to run without you:

  1. Give your employees a stake in the outcome by creating an ownership culture inside your company.
  2. Create an environment of inclusion.  Ask your employees often, “what would you do if you ran the company?”
  3. Prioritize your company’s offerings by which ones require the least of your attention.  That is, revise your selling priorities towards things that sell best without you.
  4. Fire yourself as the company’s chief rainmaker by creating automated customers.
  5. Write an instruction manual on how to run your company.

Some owners focus on growing their profits, while others are obsessed with sales goals. By  making it your primary goal to set up your business so that it can thrive and grow without you, you ultimately will increase the value of your company and make life more enjoyable.

A business not dependent on its owner is the ultimate asset to own. It allows you complete control over your time so that you can choose the projects you get involved in and the vacations you take. When it comes to getting out, a business independent of its owner is worth a lot more than an owner-dependent company.

Blessings,

Dave

Leader, Manager, Disruptor – Where Do You Put Yourself?

A few years back we worked with two different companies with two very different management styles that were affecting the business.  Unfortunately, we were brought in when things were already bad.

The one style I will call the “Resident Terrorist.”

The other I will call “Many Hats.”

The Resident Terrorist (RT) demands significant change from the employees.  As change was implemented with employee input, RT would come in and demand the use of previously ineffective processes undoing what the team thought would work in favor of RT’s known approach.

Many Hats (MH) had a command and control style.  All the decisions had to go through MH even if MH was not available.

Fear existed at both organizations.

You can imagine the outcomes.

Entrepreneurs who create their business from the ground up know every aspect of daily operations and how to do it all.  Some have the relationship with every customer even though there are other employees involved.  Can you ever relax if you are the focal point?  Can you create lasting value if you are the only decision maker?

Recently I went to lunch with a friend nearing retirement.  He knows he must let go.  He said he has a plan in place to transfer customer control to his sales leader.  This was explained to me while he took customer calls and texts during the lunch.

  • Leaders figure out how to empower their team to excel.
  • Managers do just that – manage.
  • Disruptors are managers on steroids.

All of us want to believe we can be leaders.  That means trusting your team.  Part of that is knowing their skills and mindset.

Are they on the bus, with the right people and are they in the right seats?

We have been through this.  Maybe you have been, too.

Call us. We know how to help.

Jay

Getting Results Not Just the Answer

Chose your preferred action by an employee:

  1. I hit the ball over the net and I’m now waiting for them to hit it back.
  2. I hit the ball over the net and then followed after it to see if I could get it back.

Let’s word it this way to make my object lesson more clear:

  1. I emailed the client; but, they haven’t gotten back with me yet.
  2. I emailed the client and followed up with a call to see if I could answer any question they might have.

If you’re a successful leader, you are always training your people to be following answer 2. If you’re working for the government, your employer has the reputation of always following answer 1.

I call this “communication ping pong” and nothing drives me more crazy!

Another twist of this is an old story of the wise old farmer and his two sons:

An old farmer had become so old that he could no longer work his farm and determined he would have to hand it down to one of his sons. So, he brought his two sons together and announced that he would be willing the farm over to the youngest son.

The older son was obviously furious and demanded his father change his mind.

The father listened quietly to his older son’s protest and then quietly said, “Okay. You’ll need to prove yourself first. We need additional stock. So, go to the neighbor’s farm and see if they have any cows for sale.”

The older son left to do this and when he returned he reported, “Father the neighbor has 5 cows for sale.”

The father graciously thanked the older son for his report and then turned to the younger son and tasked him with the same job, “go to the neighbor and inquire if they have any cows for sale.”

The younger son returned a short time later and reported, “Father, the neighbor has 5 cows for sale and they want $500 for each. If we want more, though, he could be convinced to sell us more and for $50 less each. He can deliver them to us as early as tomorrow. But, if we can wait about a week, he will have a shipment of younger cows that we would surely get longer service from.”

The father, thanked the son and then turned to the older son and said, “That’s why your brother is getting the farm.”

What’s the lesson here? Initiative. Looking past the basics and doing more than what is asked. Getting results not just the answer. Following through and making something happen not waiting for someone to respond.

What about you? Are you surrounded by the folks that hit the ball over the net and wait? Or people who follow the ball over the net and get answers and results?

Tell us your stories. We’d love to hear what’s working for you.

Blessings.

Dave

The bulls are firmly in control, but the bears are making a ruckus: will we be ready when things change?

Our economy has given us some great rewards in the last few years. North Texas has experienced phenomenal growth for several years now:

  • Many large companies have moved here.
  • For every one of them, 10 or more supporting businesses have moved here too.
  • And don’t forget the housing market plus all the infrastructure to support all the new arrivals.

It’s not just been a bull market, but a roaring bull market and it looks to still have some healthy life still ahead.

On a broader basis, stock market volatility has returned:

  • We have had several years of consistent upward movement.
  • Investors seem to have reached that point where they are expecting a correction and get a little jittery.
  • The market drops quickly on news and then rebounds as bulls continue to buy the dip.

The overall market is still positive.

However…

While there is really no reason for concern just yet, there is something lurking that we should all pay attention to carefully.

That something is interest rates.

  • The Fed is signaling more short-term interest increases on top of the ones they have already put in place.
  • They will also be selling debt sitting on their balance sheet into the market.

All of this will affect borrowing costs.  Not just for our own businesses but for our primary customers and their customers.

Let’s take an example.

North Texas is in a building boom.

Those buildings (projects) have a timeline to completion which could run a few years.

Lots of different companies provide goods and services to these projects: companies like general contractors, architects, engineering firms, electrical, plumbing and construction contractors, material suppliers, and related trades and suppliers.

These companies employ a lot of people who buy goods and services from other businesses.  Many business sectors benefit.

All projects rely on financing.

Companies in this supply chain use leverage (debt) too.  Increases in interest rates which is the cost of debt translates to less funds available for other purposes.

As interest rates rise the number of projects will likely decrease because the economics won’t work as well.  Some projects already scheduled could be delayed or scrapped. With fewer projects in the mix there will be greater competition for the remainder creating downward pressure on the price of services as well as a build-up in inventories.

Those with higher debt service and the least free cash flow will begin cutting costs, delaying payments, laying off employees or filing the big “B.”

Then the ripple effect begins.

There will fewer people to buy certain types of goods and services causing a slowdown in other business sectors.  We all know the process.

Today everyone’s boat is floating high with the tide.  It’s easy to make money.  The real test of leadership is being prepared for adversity–that “what if” you don’t really want to think about – and how you perform when it comes.  The cycles of 2000-2001, 2007-2009 and 2011 and the precursors are repeatable (I can go much further back but that’s giving away age).

We are enjoying the good times, will we be prepared when that changes? :

  • Can you reduce debt and what you think your borrowing needs are or will be?
  • Can you improve your accounts receivable collection time with your top customers by even a few days?
  • Do you have the right customers or should you amp up marketing?
  • Do you have the right people and processes in place inside your company and as partners?

We can get away with much while things are good.  It seems it is also a good time to fine tune.  What do you think? Sure would like to hear your views.

Jay

Do You Need It “Fixed” or Do You Want It “Changed”?

Are you at that inflection point that you need to break out of your current business doldrums? Then our challenge to you is:

Are you ready to accomplish real change, or do you simply want to keep fixing things?

Let’s say you have a leak in your kitchen sink and you want it fixed quickly because it could be causing damage. What if, on the other hand, you wanted to improve its usability and functionality, you chose to completely remodel your kitchen?

Fixing the sink merely puts things back where they were so you can continue doing what you’ve always done.

Remodeling your kitchen improves the comfort of your house, its value, and your enjoyment of it.

That’s the big difference between fixing and changing.

The first issue requires a qualified individual, like a plumber. A plumber is going to come out with his trusty tools, spend a couple of hours fixing the problem using his “best trade practices” and then hand you a bill. Voila, you’ve got a fixed sink. Everything’s back to the way it was. Quick and relatively pain free.

Remodeling the kitchen, though, is a whole different ball game. It will not be done with one phone call. Again, you start with a specialist, like an architect or designer, to determine what you want to achieve. They help define the look, the work flow, the appliances, colors, textures, the lighting.  And, oh, what’s the new sink like? Then, after all that planning, your next call is to another specialist, like a general contractor, who brings in all of the trades (and all of their tools) and transforms your tired old kitchen into a completely new and exciting environment, ready to meet your dreams for the future. That transformation took a team.

So, when we ask you: do you want it fixed or changed – we are pushing you on this significant issue.

Do you want just the quick fix, then carry on as you always have? Or are you ready to change your company into what you’ve been dreaming about?

Do you want a business fixer? Or do you want a whole team that’s going to take your company blazing into the future with change?

It’s going to take some changes. You ready?

Dave

A Testimonial: Kevin Wallace, AIA

Recently, my colleague, Kevin Wallace, provided this testimonial for me.

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If you’re anything like me, you have a problem with consultants. They are a dime a dozen. They come in and tell you what you already know, suggest what you should do or could do to make it better, and then collect a check while you’re left with an expensive report – and still no one to execute it.

Fortunately, this is not Dave’s approach.  Just the opposite, in fact.

If you’re not ready to execute your strategic plan, you can expect him to fire you – not the other way around. So, if you’re ready to be held accountable to the strategy and actions necessary to achieve your next major leap in business, then hire Dave.

If you are ready to actually change and really grow and develop your business then hire Dave. He will help you lay out your plan for success and, more importantly, hold you accountable to the actions and changes necessary to achieve your plan. Dave’s too experienced to waste your time or his.

If you want success and are truly prepared to change and are looking for a partner willing to demand it of you, then engaging Dave is a great investment of both your time and money.

Kevin L Wallace

The Simplest Customer Service Trick in the Book

I really don’t mean to over simplify this, but customer service is really simple. And the number one trick is the one so many of us overlook.

It’s returning a phone call.

To restate it, always take your customer’s incoming phone call.  If you can’t, then always return it as soon as possible.

We are constantly interviewing our clients’ customers and vendors as part of our services. This gives us an unpolished view of our client so that we can get the most street-level picture of how the market views our client. Good, bad, or indifferent; warts or beauty marks.  Every blemish.

On a recent assignment I had an unexpected and unsolicited opportunity to interview a client’s customer. I was having lunch with an associate when he informed me that he was a customer of my client. He bragged on the quality of the work and the level of expertise that everyone there showed. But – and this was a big “but” to him–they were horrible at returning phone calls. After inquiring why that stood out so much for him, he explained his reasoning.

First, a little background: they, both my client and my associate, are in a project-focused businesses where time lines and benchmarks are critical. That means there needs to be constant back-and-forth communication about progress and status of various elements of a project.

My associate, while glowing in his compliments about my client as to his abilities, he was extremely frustrated to the point of considering discontinuing any future work because he just simply didn’t hear back from him when he called. Note that he didn’t say “he got bad service or production or bad results.” He just didn’t get timely information. And many times all it would have taken would have been a call back to say, “I’m still working on it, everything is going ok, but I don’t have any changes to report.”

Simple, right? Well, if it’s so simple, why do I find this to be a common complaint? I haven’t done any real scientific or serious analysis on this, but my practical experience informs me that this is really prevalent across all businesses.

Let me just leave you with this challenge. Return your phone calls, even when you have nothing to report. If you don’t have time for a full conversation, then send an email saying you got the phone call, there’s nothing new to report, and you’ll be calling back shortly–and then do just that.

Hey, this stuff really is simple!  Remember that old line about “90 percent of success is showing up?” This is a variation on “showing up.”

Blessings!

Dave

Singles or Home Runs?

We’re coming up on Major League Baseball Opening Day. Spring time in America! You just can’t beat it!

There’s probably nothing more exciting in all of sports than to see a grand slam home run. The bases are loaded and the batter knocks it into the second level of the left field bleachers. There’s just something about that event that makes the rest of the game almost fade away. You’ll remember that play probably long after you’ve even forgotten the final score of the game.

So what?

Way back in an earlier life, I had the privilege and challenge of working with a company as the vice president and general manager of their computer distribution division. This was early in the computer business and all of us in the market were pushing and shoving and trying to differentiate ourselves. I was fortunate enough to work with a well-funded parent company, so we had the wherewithal to do some creative things–so, we did. Of course, we  were also competing many times with equally well-funded companies and that meant they were doing some of their own creative campaigns.

After trying several different programs, succeeding at some and failing at others, the president of the company challenged me with a baseball analogy (lesson?) that I’ve been applying ever since.

After a particularly costly marketing plan that did not achieve much, he said: “Dave, you’re really good at swinging for the fences with some of your campaigns, but I’d be much more pleased if you’d just give me consistent singles and doubles.”

He went on to say: “If you do that, we’ll make consistent progress and get more growth while the other guys waste their time and effort on their home run attempts.”

It’s a lesson I’ve never forgotten, even though it’s still in me to want to swing for the outfield bleachers.

As we work with clients, we challenge them to define their ideal client and that then leads to developing a more defined “go-to-market” strategy to best reach those ideal clients. While we’re not marketing experts, we are “go-to-market” experts. Meaning, that we take the “singles and doubles” approach to getting new business and keeping it. No fancy “home run” efforts. Just good old fashioned approach to improving batting averages by doing the right things consistently and repeatedly. This has proven over and over again to result in healthy growth without major investment in unproven marketing or sales efforts. Just the basics of getting a hit most of the time you step in the batter’s box. Which, by the way, happens every day.

So, when you go into work tomorrow, hit consistent singles and doubles. Forget expecting your team to hit home runs. Make sure everyone is doing the basics.

  • Call your prospects
  • Return phone calls
  • Be honest
  • Be consistent
  • Be dependable
  • Be reliable
  • Be responsible

Be the best batter – that’s the one who consistently gets a hit – not the one who occasionally hits a home run. That will grow your reputation and your business more than any other strategy.

Be blessed out there!

Dave

Snake Bit

We changed website hosts recently which meant we were also changing our email server and seemingly a host of other things. If you’ve ever done this, you would agree that I could end this post right now, without ever saying another thing and you’d get the point. But bare with me . . .

Between me and my closest confidant, Paul, we thought  it would be simple enough to do this. Sign up with a new hosting service and then follow the instructions on their site as well as the instructions on the current host’s site and voila – we’re done. A couple of hours, max. Not so much . . .

It seems that everytime I touched something it bounced something that Paul was doing. And then vice versa. So, again, simple enough to fix this. We engaged an expert to jump in and bail the project out and get it done. A week later the website was still not transferred!

While this was extremely frustrating, I joked with Paul, that this was just one of those snake bit projects that we experience every now and then so we just needed to gut it up, press in, and get it done. His reply was, “snake bit?”

If you’ve been in business for any length of time, you’ve had more than one of these types of projects. I call them “snake bit” because it’s like you’re in a pit full of snakes and you’re just trying to get from one side to the other – where the ladder is. Every step you take, you step on a snake and get bit. Doesn’t matter which way you turn, or how careful you step, you’re going to get bit. So what’s the solution?

Solution One: Run in place, stomping around angry, screaming at all the snakes. No, that just makes the snakes madder and more of them are going to bite you.

Solution Two: Stand still and hope they will all move away and clear a path for you. Uhh, has inactivity or delaying ever worked for you to get a project to completion?

Solution Three: Admit you’ve been bit, gonna be bit again, take a deep breath and move to the other side. Still going to be painful, but you will get through it and get the project done. The real answer here is to “suck it up!” Focus your time, effort, money, staff, everything on getting done with this project. Don’t cancel it, don’t delay it, get it done and over with. Tell everyone that’s the plan. Don’t let anyone off the hook – and that means don’t let anyone on the team delay it or “run in place creating more mad snakes.” Get it done and get over it.

My point with all this, is we all have these snake bit projects. The only way to get through them is to re-focus on it with a redoubled determination. There will be some hard things to do. Maybe admit to a customer that you’ve failed him or her in some way – but you’re going to fix it. Maybe it’s going to cost you more money than you budgeted. But it’s going to cost you way more if you keep dragging it out. The emotional cost is going to be heavy, too, if you drag it out.

So, snakes or not, when you’re in the pit, renew your and your team’s focus and resources and get to the other side. There’s safety over there. And the lessons learned will be things all of your team will remember and apply in the future.

Blessings!

Dave