By Janna Hoiberg
Being an entrepreneur is a challenging occupation. It is filled with opportunities beyond your wildest dreams. Those dreams can also become the nightmare you never wanted. Working with business owners, I find most of the challenge is in the day-to-day operations of the business. That day in/day out, cash flow, hiring, firing, marketing, selling, and servicing customers can be a 24 x 7 job. The challenge is to start running your company and stop having your company run you. If your company runs you, then after a period of time, you burn out. What happens next is you want OUT. You want out of the business and have no idea how to make that happen or what to do next.
Reality is, we will all exit our business at some point in time. For some, it is a well-planned and executed event; for others, it is a reaction to a set of circumstances, either personal or economic. The opportunity in each is the ability to have control of the end result. You have probably heard the term, “Begin with the End in Mind” – the concept is to start and then run your business with the mental attitude that you will exit your business and know the desired end result. What does that look like for the business owner? CPAs, attorneys, business brokers, and business coaches will all tell you that you need to prepare, plan, and have your business perform as well without you as when you are involved. That doesn’t happen overnight, or even in the first few years of running the business. However, if you aren’t day-by-day building an operation that has the right systems, a great team, and financial checks and balances, you will probably not get the desired value out of the business.
Let’s look at two examples:
Example 1: You own a company that has the training and documented (yes, that means in writing — not in someone’s head) systems in place for all aspects of how the business operates. You track all critical Key Performance Indicators (leads, conversion rates, average dollar sales, revenue trends, profitability, etc.). You have a team that knows what to do and how to do it, that carries what I call an above the line attitude (ownership, accountability, and responsibility). The business is profitable month after month, quarter after quarter. The executive team knows the vision and mission of the organization and executes to it — even in your absence.
Example 2: You own a company that is built around your strengths. Customers want to deal only with you. You are often turning over team members. The team doesn’t perform the way you want them to and are constantly blaming others, coming excuses, and denying it is their fault. Cash flow is unpredictable and profitability is a word not often in your vocabulary.
Which business would you want to purchase? Which business will be easier to sell and will receive a higher valuation? What makes the difference between the two business owners and the results they receive?
After having run businesses for 30 years and now coaching business owners, there are a few principal differences.
- Practice the concept that “Today Matters.” What you do each day in building your business makes a difference in the long run. Each day do at least one thing that isn’t working “in” your business, but “on” your business. Have written specific goals that steer the business in the right direction. Read the book by John Maxwell, Today Matters, for very practical tips.
- Learn the power of leverage. Document what you do, how you do it, and train others. Hire differently than your competitors. Hire on attitude first, skills second.
- Know your Key Performance Indicators for financials, team, customers, and overall business. KPIs will help you see trends both good and bad and allow you to plan accordingly without reacting.
- Have a team of outside advisors who hold you accountable to results. Whether you have run a business for 2 or 20 years, you need someone from the outside challenging you to look at things differently and pushing you outside your comfort zone. Eleanor Roosevelt stated: “Do something every day that is outside your comfort zone.” That will keep making that zone larger and larger.
(originally published in July 2012 eNewsletter)
Janna Hoiberg provides executive coaching, leadership training, and business growth strategies to business owners, executives and CEO’s who are ready to take their organizations to the next level. She has over 30 years practical hands on experience running businesses. Contact her at www.actioncoachadvantage.com or 719-358-6936 or email her email@example.com