Somewhat coincidentally with the theme of this month’s article you will notice a new look to our eNewsletter format. Hopefully, you will agree with me that it is easier to read and provides useful content. I would like to thank FBB team members Memory Garrison (aka “Mem”) who is the friendly voice that usually answers the phone and who faithfully publishes our eNewsletter, and Kirk Gillespie, who is our business analyst, who brings a fresh set of eyes to the project, for their good efforts and creative talents.
After a long and cold winter, seeing fresh growth and more consistent sunshine are not only welcomed but much needed. For businesses, a “long winter” can be characterized in ways other than the weather. As any seasoned business owner will tell you, the question of passing through “snowy conditions” is not a matter of IF, but WHEN.
Losing clients, personnel issues, layoffs, marketing fiascos, poor record keeping, and bad breaks are all examples of “winter storms” that come to each business in their own unique way and inopportune time. While no business would ever ask or seek out these storms, they really can help a business with new opportunity and new growth by providing the landscape of not only surviving, but excelling, if proper steps are taken.
In 2004, Lego was on the brink of bankruptcy. The four years prior had brought year over year of decline in revenue and a steady reduction of support from their fans. They found their brand had become old and tired, they were unable to deliver on what their customers wanted, and, at the same time, saw their costs continue to increase – never a good position to be in as a company. All signs, and many industry professionals, predicted the end was near for this iconic international toy maker. Certainly, this winter storm for Lego appeared to have the pipes frozen and all roads blocked with snow and ice. A change was needed, but no one knew exactly what to do or what would work.
Lego’s new CEO, Jorgen Vig Knudstorp, couldn’t even see a clear way forward. Howevever, he did what any good business manager and leader would; he simply started working. He literally grabbed a shovel and began removing the snow away from the driveway and sidewalks by stabilizing costs and reducing overhead. He didn’t look at the snow that was all around him as just cold heaps of roadblocks, but focused on the moisture that lay inside the snow. His vision provided the sunlight of hope that penetrated throughout the company and began to melt the snow and feed the creative soil that lay beneath. His hard work, vision and creative approach worked; even beyond what he had hoped for.
Now, more than 12 years later, Lego has not only restored its position as a premier toy maker in the world, but has pushed beyond what it thought possible during those bleak and foggy days. Such can be the case with almost any business if the proper work, vision, and creative approach are used to see the moisture among the snow, see the growth beneath the soil, and find the sunlight through the clouds.
One significant and very real challenge for a business to overcome is seeking to sell while the storm is raging. Very few investors are looking to purchase a company when the ship is sinking; if they are, it is for a drastically reduced price. Plowing through is difficult but once again, can bring a business to an even better place and more vibrant pastures.
After having weathered the storm, when conditions return to warm and sunny, is the best time for an owner to evaluate their options and personal goals. It may also be the best time to sell the company at its highest value; all of which would not have been possible without your years of hard work, vision, and creativity to make it through each and every storm that not only threatened the livelihood of the business but made it stronger in the process.
We applaud every entrepreneur as they battle their own winter storms and seek brighter days ahead with new opportunities. We are here to help with advice before, during, and after the storm, providing counsel and strategy to assist in making your business as valuable to a potential buyer as possible.
Thank you for your past and future business.
The majority of our business is derived from referrals. Please consider referring our services if you encounter a situation involving the potential purchase or sale of a business.