Time and again I come across owners of SMEs who have spent their life working in their business, concentrating on day to day issues, putting out fires and generally being reactive to the marketplace. They truly believe that they are doing all they can to grow their business and be successful, in many cases they have grown from a one man band into a multi-million dollar turnover business. As they have mostly ended up in the role of managing director without anyone to guide them, they have just had to feel their way by trial and error.
From the outside they appear to be successful, indeed their employees often resent them as they think that they are being exploited and that the “boss” is getting rich from their hard work!
When you actually analyse a business such as the one described above you often find that this is far from the truth. Sure the owner has a nice house, a nice car etc however they also often have a big mortgage linked to their business & extreme stress caused by the lack of up to the minute data demonstrating just how the business is tracking (and no I dont mean the P&L reconciled by their accountant several weeks after the fact!).
The reality is that they are blind to how the business is actually going, they have no idea on expected cash-flow or profit projections. There are no KPIs or expectations in place, no vision & strategy of how to get there. Employees have no sense of purpose, morale is low and productivity is down. The owner wonders how the company ended up in this position; they hired managers as the business grew but instead of profits growing they were simply absorbed by the extra overheads! Where did they go wrong they say to themselves? As they approach impending retirement they wonder just how much their business will be worth to prospective buyers? Who would buy this headache?
Not a very nice position to be in after working IN their business for so long with all the sacrifices endured, you are probably thinking? Well it doesn’t have to be this way but if the above describes your position and you continue to do things as you always have (and expect things to improve) I’m afraid that the above scenario is very likely.
So what to do? You’ve heard it a million times, you know you need to do it. But knowing and doing are two very different things! It’s time to work ON your business, yep I know nothing new there but are you doing it? I suspect not.
If a comfortable life in retirement and leaving a successful business as a legacy is important to you, then it’s time for change. Define your vision for the business, what is it’s core purpose? What are the strategies to make it happen? Make sure you involve your employees, get their buy-in.
Create a one page plan of the vision and the strategies, the timeline and the accountabilites then communicate this regularly to your staff. Reading “Mastering the Rockefeller Habits” by Verne Harnish will really help with this, but again knowing is not doing, it’s all in the execution!
Do you fear the alternative enough to make it happen? Then follow the above simple steps and Your Exit Strategy will be a guaranteed success.