Sidewalks, groundhogs and accounting

A couple weeks ago, Puxatawney Phil saw his shadow. As the legend goes, this indicated that we’d have six more weeks of winter. Given the kind of winter we’ve had so far, I expect more shoveling before April and May get here. Yet we’re not here to discuss the weather, at least not specifically. As I’ve roamed Montana this winter, I’ve noticed a pattern that struck me and made me a bit curious. Is the condition of the sidewalk and parking lot in front of a business an indicator of how things are being run inside the building?

Have you have heard the theory that the condition of someone’s car is a reflection of their home and/or their life? You may have heard the same about someone with a messy desk. Whether it’s true or not, it’s an interesting parallel to the pattern that I referred to earlier. The pattern is that businesses that I know to be well-run, well-executed “tight ships” always seem to have parking lots that are cleaned up quickly after it snows – and the sidewalks in front of them in almost every case is routinely spotless, salted and kept free of ice.

I don’t have internal knowledge of all the businesses in this pattern – ie: the ones who fit and the ones who don’t, but it’s quite accurate among the ones that I have internal operations knowledge of.

Broken windows

Years ago, there was a book about crime called Broken Windows, which was based on an often argued theory that doing things like immediately fixing broken windows and removing graffiti soon as it appears sends a message to the community that the area is cared for and monitored, so the criminal element goes elsewhere. New York City applied this during its well-known (and successful) battle to reduce crime over the last couple of decades.

Crime is a complex thing when you’re looking at a large urban area. First impressions, however, are not. When you arrive at a business and notice broken windows, dirty bathrooms, dirty floors, messy work areas, a sketchy parking lot, etc – it’s difficult not to wonder how things are going in the back room. How well is that business run? What sort of initial and ongoing training to the employees receive? Are their books a mess? You may not care about how under control their accounting is, but if they can’t seem to do a good job of recording your payments, you’ll start caring.

All of these things can be indicators of bigger, deeper or widespread problems. You can’t necessarily assume – everyone has bad days or makes a mistake now and then. It’s tough to keep up with the snow when you get 48″ of snow in three days.

Why does it matter?

How businesses deal with these things tends to be an incredibly accurate indicator of what’s going on elsewhere in the company. Some have well-thought out plans for what happens on days when roads are all but impassible. For some, it doesn’t matter. For those who you need to go to the hospital, I’ll bet you’ll want them to have a snow “disaster plan” that makes sure the hospital is staffed regardless of the intensity of the weather.

You can see similar things when working with employees. It’s crystal clear which businesses invest in their staff and which ones leave them to learn by the seat of their pants. While experiential learning is often a good thing, training and reinforcement gives everyone the same foundation, and sets minimum standards within a company. Without those things, the customer-facing experience and work quality can differ substantially – the last thing you want.

Why is that important? Consistent experience is everything. People don’t want to worry about which version of your business they’re going to experience today. Why else would someone repeatedly visit the same franchise restaurant as they travel the country? They know they will have a consistent experience. They know how long it will take, what it will cost and what the food will be like – regardless of the class of fare that restaurant serves.

A consistent experience is critically important to customers. The expectation (and history) of a known-to-be-consistent experience is frequently the deciding factor when “all else is equal”, even when it isn’t.

Keeping that in mind – What kinds of signals does your business send?

Hire for commitment over ego

The difference between a strong business leader and a weak one is easily detected: Who do they surround themselves with – and why? Do they hire for commitment or ego? Time and time again, you can see examples in business where a business owner surrounded themselves with one of three kinds of people:

The kind of people who will agree with everything the owner says or proposes, almost (if not never) disagrees with the owner, and when cornered, will err on the side of silence or “I’m undecided” rather than taking a stand that might later prove to disagree with the boss.

  • The group who will say little or nothing when they disagree with the owner.
  • The group who will make decisions independently, regardless of the owner’s stance / position, and aren’t inclined to hide that from the owner.
  • The group who will make decisions independently, regardless of the owner’s stance / position, but aren’t willing to offend / rile the owner by stating their disagreement.
  • The group who will disagree with the owner’s choices and decisions no matter how valid – simply because they’re the owner.

There are probably a few other groups / types that I missed, but this list covers the majority of what I’ve seen in the last 35 years.

Which group should you hire from?

From where I stand, neither 100% agreement or disagreement is a good thing, unless each decision is arrived at through analysis and thought. However, as we’ve all seen, some of these disagreements exist simply because they can (a minority, in my view) and others disagree because they feel the owner is making a mistake – however legitimate they feel that mistake might be. When you feel your boss the owner is about to make a mistake that could seriously affect your business, you have choices, which tend to fall into three categories:

  • You disagree, say so and make your case to your manager or the owner.
  • You disagree and say nothing.
  • You disagree and make your case to your peers.

When you hire someone, which choice would you prefer your future employee takes?

For me, it’s the first one, if you’re hiring for commitment over ego.

Making this possible is on you, the owner

So let’s say you’re on board with the whole “I welcome my staff to disagree with me as long as they’re will to discuss it” thing. It isn’t going to happen unless you create an environment that makes it clear that you appreciate it AND that disagreeing with you isn’t going to come with a cost. Saying it is rarely enough. You have to prove it. If it’s been a long time since you were an employee, you may wonder why you have to prove it, but trust me, you do. You might even have to create a situation where a reasonable (ie: calm) discussion gets started, even if you have to “stage” (pre-arrange) the start of the conversation. It might seem a little disingenuous to plan a discussion like this and arrange for someone to disagree with you, but it’s THAT important to show everyone that you’re willing to engage in such a discussion. You need to say and show that it’s ok to disagree with you. You will also need to find a way to communicate that it’s not OK to be a jerk when you disagree with the owner, but otherwise, it’s OK to do so.

Once the discussion is done, it’s also critical that you follow up both privately and publicly. After you’ve had time to reconsider your discussion given the input you received during the disagreement discussion, call the person into your office – and do so that it’s obvious you’ve called them in. Discuss with them what your decision is, whether you changed your mind or not. Explain to them what their comments made you reconsider and how they impacted any other work you’re dealing with. If they changed your mind, explain why. Either way, be sure that they know that the risk they took in front of everyone was zero risk and had a return on investment: You recognize that they have the best interests of the company at heart (commitment) when they publicly disagreed with you and that you appreciate it.

Hiring for commitment over ego means hiring someone who is willing to take a stand because they feel it’s best for the company.

Inauguration Week, a time to stay focused

I have written on this topic several times over the last 12 years: Inauguration Week. More specifically, what happens to the business world after Inauguration Day. When Bush 43 took over in 2001, there was hand wringing. Before Obama took over in 2009, there was hand wringing. And now, with Trump’s takeover days away, the sound of hands (w)ringing, toll yet again.

The problem? That new President-elect. “He / his policies / his party’s policies will ruin my business.” . Doesn’t matter which President-elect, even though it’s hard to imagine that the last three or four president-elects could be more different from one another. Even so, I hear the same refrain I’ve heard every four to eight years.

I can’t start a business with so-and-so / whichever party coming into power.

My business is in trouble with so-and-so / whichever party coming into power.

Sure, there is some impact

I don’t mean to say there won’t be some impact. This time around, like every time, there is likely to be some impact on the energy business, on taxes, on healthcare, etc. Thing is, they’re impacted seemingly all the time by legislation from both parties, by world events (war, finance, technology changes, OPEC) and more. Is the price of gas / diesel different than it was before Obama? Before Bush 43? Sure. And it will be pretty much every week for years until some point way off in the future when technology matures past the use of those fuels.

However, when it comes to most businesses, the impact is usually trivial and the concern overblown. How you serve your customers and how effectively you sell and market to them has a much bigger impact in most cases than anything some randomly chosen President can do.

Sure, there is a lot of change in Washington. There will be, as always, a lot of pieces moving around on the chess board, and there will be plenty of drama in the news. As there always is.

Little, if any, of this has anything to do with the success of your coffee shop, sandwich store, plumbing business, clothing store, software consultancy, etc.

Don’t let Inauguration Week and a new President distract you and your team. Stay focused on your plan and your goals.

Step away from the drama

There is plenty to look at in the news that can make you take your eye off the ball. Don’t let it win. There is plenty to distract and worry your employees and contractors. YOU have to maintain momentum and leadership. not the TV news. It’s your job to make sure your team doesn’t get distracted and lose confidence over whatever’s going on in the news.

Use all the change as a reason to refocus and stay focused. Use it to rally your team. Remind them that no President has ever had a dramatic effect on your business. Be sure they know that you believe that the group of people working there now will not be the one to allow this (or any) President to be the first to negatively impact your business.

I know this might seem silly to some, but the thought processes are out there. People are always worried about their future when these kinds of changes occur. It’s easy and the news doesn’t help.

You have a plan for the year, right?

I’m sure you have a plan for the year. We’re already halfway through January. Remind your team of where you are toward your January and 1st quarter targets. Given the lack of likely impact by the changes in DC, it’s an opportunity to show your team what early trends look like.

Your team and your market has had over two months since the election to settle down. If your business is down since that time, I hope you know why. It might be normal for this time of year. If it isn’t, determine the cause and share it with your team. The last thing they need is to let the belief that four or eight years of that is inevitable.

For the same reason, if your business is up over the last two months, be sure to explain why. Your team needs to know why and how their work is affecting results and not that something completely out of their control (like political change) is driving your business’s performance.

Keep them up to date on the plan, its progress and course corrections you’re making. Keep your eye (and theirs) on the ball.

How to take the chill out of a cold email

With double digit below zero weather arriving in Montana this week, the last thing any of us need is a cold email.

What I call a cold email isn’t quite the same as a bulk email. While bulk email is indiscriminately sent to many thousands of people, a cold email might be sent to 10, 50 or 100 people. Bulk emails are seldom effective as lead generation tools, while cold emails can be an effective lead generation tool from a somewhat targeted list.

What is a cold email?

Cold emails are often written from templates and sometimes are pasted into an email program before they are sent. Sometimes, they’re mail merged (ie: personalized), sometimes not. Template-based, mail-merged emails aren’t a bad thing until you send a generic one to the decent quality lead with a message that makes little sense.

Who gets a cold email?

They’re often sent to people you might have seen or heard of at a Chamber of Commerce event – but you weren’t introduced to them and you didn’t meet. You might have their email because of a list you have (or bought) access to, such as an industry group list or a list of trade show attendees.

You might have manually harvested the email addresses from web sites of companies that might be a good fit for your services. For example, if you serve small bakeries, maybe you Google’d “bakery northwest montana”, found a list of bakeries within 100 miles, then grabbed the owner name and email from each site.

While that shows a little effort, it can all be lost depending on your next move.

The trouble with cold emails

Cold emails don’t often get a response, because their content simply doesn’t encourage you to read them, much less take action.

Cold email failures:

  • The subject line doesn’t provoke you to open the email. Instead it says something like “sender’s company name product category”. Example: “Smith-Jones Systems – Point of Sale Software”.
  • Your content is so general that it shows you made no effort to understand the recipient or their needs, so it reads like every other spam they receive.
  • The email is written from the “me, me, me” perspective (talks about the company and its services) rather than talking about the reader.
  • Your email reads as if it came from a template. While the slightest bit of work could make it personal, that effort wasn’t invested.

Making a cold email personal

This email is your proxy. If you read an email you sent last week, does it sound like you? Is it the introductory conversation you’d have in person with a prospect? My guess is that it doesn’t and it doesn’t.

The email needs to speak to a specific problem. What problem do most bakeries have that your point of sale (POS) software solves? Bakery owners don’t wake up in the morning thinking “Boy, I sure wish someone would try to sell me point of sale software today.” Yet these same bakery owners might be thinking about how annoyed they are about the inability to predict shift coverage based on sales levels, print tax reports, produce custom order tickets, add stations, or some other thing. Their staff may have complained about other problems with their POS.

40% of your clients may have used a specific POS and moved to yours because of three specific benefits, differences or improvements. Do you know what these prospect bakeries currently use? What do their people think about it? Given that 40% of your clients used that tool, you should have some specific info for bakeries still using that old POS. Send a specific email to users of that POS vs. bakeries using other software.

Observation

Have you been in their bakery and bought something so you can see how the staff reacts to working on their registers or POS stations? Did you sit there, as appropriate, and have a cup of coffee while observing how things go when they are busy? Did you listen for comments from the staff?

While you don’t want to fill an email with ALL of this info, this knowledge is critical to understanding why a baker would want your POS.

Sure, these emails are more laborious to produce, but your job is to get new clients, not see how many emails you can send.

You don’t send marketing email? This knowledge also applies to phone and in-person sales calls.

Brainstorming your 2017 Business Roadmap

It’s a hair after five am on January 2nd. 2017 is barely underway. Have you started working through the first task on the detailed 2017 business roadmap that you painstakingly carved out last month? I’m referring to your checklist of all the things you want to get done to grow and improve your business this year. I suspect that list includes a number of tasks that execute on the strategies you worked out to improve your finances, marketing, sales process, and customer service – all while edging your way into adjacent markets, right? If that’s you, I hope you stay the course, crank through your roadmap and make some great things happen.

If that isn’t you and you’re beginning to consider what aspects of your business need your focus for 2017, maybe this 2017 business roadmap brainstorming discussion will help.

What’s your business roadmap expected to accomplish?

Without knowing your specific business, it’s tough to focus on the exact challenges you’re facing. So what do we do?

Experience tells me that you likely have one or more of these four things on your todo list for 2017:

  • Increase sales.
  • Reduce expenses.
  • Improve profitability.
  • Improve quality

While those are all good things to accomplish, let me first suggest that you nail down exactly what you want to accomplish with this list.

What does “Increase sales” mean to you? Does it mean double or 10x your sales? Does it mean sell one more car a day? Does it mean that each salesperson will sell $1000 more a week?

Until you decide what “increase sales” means, it’s going to be pretty hard to hit that goal. The same goes for each of these targets. Once you’ve decided, then there’s more drill down to plan each project that moves you to these goals.

You may tire of this process, but it’s exactly what you need if you’re looking at a 2017 goals list that looks like the four item list above. You need to know how far (and where) you want to go and what is involved in producing with the increase you’re striving for. Not advisable: Wandering off in a goal’s general direction and hoping you’ll get there.

What’s hiding inside “Increase sales”?

As an example, the first item can and should be broken out into multiple goals even if each one of them isn’t applicable to your intent to triple sales:

  • Get new customers. (What kind of customers? From what lead sources?)
  • Keep more existing customers.
  • Sell more to existing customers (selling more frequently, selling more expensive things, or both.)
  • Find new products to sell to your customers. (things that make sense in the context of your relationship)
  • Find new services to sell to your customers. (ditto above)

These can be broken down as well. Drill down until each goal’s first step is obvious. You’ll have to delegate. Delegation won’t go well without specifics.

Now you have a bit of a template for breaking down annual goals so that you can start executing.

What’s involved in tripling sales?

Let’s say you sold $340,000 last year and you want to triple sales this year. A 300% increase is a tall order, but it isn’t impossible. The big question is “What makes this possible?”, because the effort is in the details.

If I ask for explicit details on what you need to do, you need to know what it’s going to take because there are resources that must be invested to make that kind of growth happen.

Let’s say you have two sales people and each of them sold $170,000. To hit $1.2 million, you’re either going to have to hire four additional sales people capable of selling $170k a year, or have your existing sales people work *at least* four times as hard, or some combination thereof.

But that’s not all.

Four more sales people will need four times the leads. Customer support will be affected by a 300% increase in sales, as will delivery, storage, accounting, supplies (and suppliers) and finances.

You need to think about exactly what it’s going to take, map it out and then start implementing your plans. Then you get to repeat the process for each goal.

Running off the roadmap

What if you miss a month? Or a quarter? How does that affect your execution of the impacted areas (service, delivery, etc)? Have a plan B figured out in advance so that you don’t have to figure out plan B while plan B is being executed. Last minute, panic or fear-driven planning seldom works out well. Think about contingencies for each aspect of your plan that has risk of failure. Communicate early and often if it happens.

Who on your team is wired for tough situations?

In every sport, a team’s best players want the ball when the game is on the line and nothing but an amazing performance will help their team win the game. Regardless of the potential cost to them personally, the risk of failure and the pressure of the moment, they take charge during tough situations.

In your business, you likely have staff members built the same way. These are typically the folks on your team who step up in tough situations, probably for the same reason. It’s how they’re wired.

How’d they get wired that way?

I haven’t ever explicitly asked someone what makes them “want the ball late in the 4th quarter” but I suspect they would answer one of two ways:

1) In the early / formative years of their career, they had responsibility thrust upon them by virtue of the work laid in front of them. As a result, they’re become accustomed to tough situations.

In this case, it’s a matter of training and familiarity. Once these situations become normal, their confidence in handling them grows over time to the point where stepping up is simply part of what they do. They don’t see it as a big deal because being the one who deals with these situations is just part of who they are. One of the things that gives them this confidence is time spent in tough situations in the past. Be sure to include your up-and-comers to participate and observe so that they also gain this experience.

2) Leaders and peers have always shown confidence in their ability to perform under pressure, under deadline and in other tough situations.

This demonstration of confidence comes in several forms. It shows in team members asking not simply how they can help, but by taking on specific tasks that they’re confident your “crisis players” can trust them to handle. It shows in leadership asking if they can help (and if so, how) rather than yielding to the temptation to check for progress so frequently that it becomes an interruption. It shows in everyone asking questions that provoke the team to think a little differently about the problem, and to question and discuss every assumption.

How do you find more people like that?

Ask.

Prepare interview questions that provide your candidates with the opportunity to explain their experiences during crisis situations. When your team nominates someone for an opening at your company, discuss your “interview crisis” questions with the nominating employee. Your goal: to gather their viewpoint of candidate’s ability to handle crisis situations, and their observations of the candidate’s behavior under pressure.

Here are a few generic examples that will help you create better, more specific questions that are more appropriate for your business: Would you want to work with this person when trying to solve a problem that threatens the life of the company? Why? What about this person’s behavior under pressure impresses or concerns you? How do the peers of this person react to this person’s crisis behavior?

How do you help in tough situations?

Ask any crisis player you know what kind of help they need most when dealing with these situations. It may take them a while to mentally step back through the process. This should encourage you to plan on a discussion after the crisis abates. It’s not unusual to have these meetings so that we can, as we are famous for, make sure this never happens again.

Reacting to what happened so that it doesn’t reoccur is important, but what’s desperately needed is getting a lot better at prevention. Ask your crisis players what would have averted this situation. Ask them if they saw this coming. Ask them who else saw the oncoming problem. Ask them who listened to those who raised the alarm and who didn’t. For that matter, did ANYONE listen?

You’re not asking for names so you can have a witch hunt, but so that you can identify those who see things before others do. Some people have a sense about these things and ask questions or notice issues long before others. These folks need to know that management has their back when they think they see something.

One way you help your existing crisis players is by identifying players in the making and by giving all of them the resources and ear they need.

Adding value to gathering feedback

Being obsessive about the customer-facing activity of your business requires some discussion about the company’s process for gathering feedback.

Ironically, these systems and processes for gathering feedback tend to be at their worst when the customer would benefit most from being heard. It isn’t much of a stretch to imagine that the process for responding to feedback typically trails a company’s collection of feedback.

Why is feedback broken?

Because feedback is a multi-faceted beast, it tends to be broken in any number of three ways, including these:

  • No one is collecting it.
  • Someone or something has made it incredibly difficult to share.
  • When it’s collected, it goes nowhere.
  • When it’s collected, it isn’t tracked (no source, no situation, no financial impact etc).
  • When action is taken on it, there’s no effort to follow up.
  • When action is taken on it, there’s no communication to the rest of your customers.
  • It isn’t used to improve the rest of the company.

Feedback has four parts

Feedback is a four part activity, so be sure that none of the pieces are broken.

The pieces are: Collection, Valuation, Action and Communication.

Collection is a matter of letting your customers be heard. Many times, simply giving them an outlet for their feedback will satisfy them. In some cases, people simply want to vent and may not care if you respond (you should). Finally, feedback often comes in the form of a suggestion, and in many of those cases, people don’t expect a response.

Collection is more than simply saying “Thanks, we got your comment”, but that should be the absolute minimum if that’s all you can manage. There’s always time to improve, since every day is a good time to improve something.

Valuation is an often ignored part of the collection process. It’s easy to take a complaint, tell someone you’re sorry and give them a coupon for next time (or some such), and then move on. Unfortunately, that wastes the value and opportunity that hides deep inside the feedback.

Valuation

Valuation assesses the feedback and its impact on your clients, and your company. For example, you may get feedback about certain things which only come from the customers who buy your most expensive products, but only during third shift on the weekends. The when and where both matter since many businesses function a bit differently during “off-hours” or non-prime shifts.

Sometimes feedback points out “reaching demand”, a client behavior (doing something, hiring someone and/or spending on something) that identifies a need that should become a part of your offering. Other times, feedback points out a failure point in a product or service that needs attention. It could be about quality and workmanship, or a lack of clarity in marketing materials or sales processes that creates a disconnect between expectations and reality.

Valuation helps you assess what parts of the company can be improved by the feedback, beyond the context of the complaint.

Taking action

If your company’s feedback loop ends at “Sorry, here’s a coupon for next time“, who misses out the most? Your management team.

That eliminates an opportunity to take a high-level view of the problem for further action. Nordstrom is famous for its empowerment of employees to make things right in these situation, and their feedback loop doesn’t stop at the employee.

While these complaints might seem to be “employee failure alerts” that a line employee might want to hide from their manager, they often point out where management needs to provide better support and/or infrastructure to their staff.

Without complaint awareness, it can be difficult for managers to see trends that (going back to valuation) can be incredibly wasteful and expensive. This is particularly true when there are lots of part-time people involved across changing shifts – negating the ability to see such trends.

Communication

Many times when you file a complaint, you get a response indicating that the company isn’t staffed to respond personally to each complaint. If you can respond to each one, I suggest doing so. If you have thousands of clients and get a lot of feedback, it can be overwhelming to respond individually.

However, individual responses can often be avoided if you respond in a way that serves many. Use your website, email list or text subscriber list to discuss complaint resolution, including the actions taken. Share internally with your team as well.

Preparing your business for sale, or not.

As you get a little older, one of the natural things you start to think about is “What am I going to do with this business?” While you might find a buyer (as many do), or you plan to involve your family in some way. Anyone else might have to search for a while. While you’re considering that (family or not) and dealing with the day to day, it’s worthwhile to spend some time preparing your business for sale.

One of the ways to do that is to start thinking about what happens the day after closing. In many cases, your buyer is likely to request some sort of financing, which often comes as a revenue split payable to you. If you have to (or want to) do this, you’ll be a lot more interested in the buyer’s success.

Leaving a road map

Leaving the new owner a road map can’t hurt, no matter how experienced they are.

What roles will have to be filled to take over your business?

  • Daily operations
  • Product management and development
  • Finance
  • Infrastructure management
  • Marketing
  • Sales

You may have others, depending on your business.

What do these things involve?

Daily operations

In brief, run the business day to day, relieving the owner of all tasks. Making sure everyone on the team is communicating and is being communicated with. No mysteries, no surprises. If you had to be replaced tomorrow, what would it REALLY take?

Product management and development

Managing employees, consultants, their projects and the quality of those projects. Planning and executing testing so that quality meets or exceeds both your own and your customers’ expectations. Working out ongoing product plans, deployments and deadlines so these projects can be coordinated with other parts of the business.

Finance

Monitoring AR / renewal rate / renewal speed, keeping the bills paid, updating metrics, etc. Making sure your financial records resemble something a buyer and their people (banker, investors, etc) expect to see.

Infrastructure management

What infrastructure do you currently have to manage and care for?

Marketing

Planning, design, development, and execution of marketing efforts per your marketing calendar. What prospects are you not reaching? Are there prospects who need what you do, but simply aren’t exposed to your company because of (what, exactly)? When you have churn, what is the cause? When someone declines to purchase, what are the reasons? The answers to these questions change over time, so they must be asked on a recurring basis. This includes lost customer re-acquisition.

Sales

Improve, manage and document the sales process. If there isn’t one now, develop one. It’s “easy” to take a company to two times current revenue by doing more of what you’re doing now, the same way you’re doing it now – throw “bodies” at it. However, it’s all but impossible to 10X a company that way.

Investigate expansion into adjacent markets

Are there closely adjacent spaces you aren’t yet addressing? Do the people that work with the people who work with your products and services all day need your help in a way that relates to your existing business?

Identification of partner and cross-marketing opportunities

Investigate partnering and cross-marketing opportunities where you can leverage your reach to help your partner and where your partner can do the same for you.

Standardize and organize company finances

Investors, angels and prospective buyers expect (hope) to find well-organized finances in forms they’re used to seeing. I don’t mean to say that your finances aren’t organized now (are they?), but they may need to be more formalized. What you want is something that wouldn’t raise concerns when an investor and their professional finance team sees them. Being able to provide such numbers to them on relatively short notice sends a message.

Other benefits of preparing your business for sale

Everything here is about ultimately about preparing for exit. That doesn’t mean that you aren’t focused on customers, in fact, it means just the opposite.

Everything you do to prepare a company for sale prepares it to withstand market challenges, slow months or quarters, while also making it more attractive for purchase. In particular, the road map makes it easier for you to “replace yourself” in the event you decide not to sell and instead, decide to become a passive owner.

No matter what direction you go, making the business stronger benefits you and the new owner.

A well-armed minutiae: Urgent, not important.

Yes, I said “minutiae”, not “militia”. The similarity and power of these two words struck me, so I thought I’d substitute one for the other. One of the most dangerous things in your (and your team’s) day to day productivity is the “crisis of the unimportant”. IE: tasks that seem important only because someone interrupted you with them. Minutiae are the little things that, left uncontrolled, will consume your day and leave it unfulfilling, perhaps annoying and almost certainly empty of substantive accomplishments. Stephen Covey spent his career preaching about preventing these tasks from consuming your day – categorizing them as “urgent, not important”.

Eliminate minutiae with systems

As the owner or a senior manager, it’s critical to get out of the “interrupt me early and often” mode as soon as you can – but that doesn’t mean you can ignore the needs of those who interrupt you. You simply need to find a way to deal with them and set boundaries for them. A system helps.

Back in the days of Photo One, photography studio owners asked me to solve this problem for them. To the studio shooter, the most valuable revenue-creation time was in the camera room – ie: behind the camera time with the client in a room full of props, lights and other tools of the studio photographer. When they’re in that room with a client, the value they’re creating can create revenue for years, so the last thing they want to happen once they have “warmed up” the subject is to have the rapport / groove interrupted by someone asking where the coffee filters are, or how to process a refund for a charge split across two cards, or similar.

One answer to this is a system that provides answers to “interruption questions”. A studio owner told me that they had an answer / procedures book to deal with this, but they didn’t like the maintenance headache that it caused. This book predated Google docs and wikis, so they edited everything in Microsoft Word (or similar) and then printed the answers / procedures and put them in a three-ring binder.

The process established in the studio was to consult the book if you didn’t know the answer, then ask your manager and only then could the shooter in the camera room be interrupted. That interruption was OK only if it couldn’t wait until the camera room appointment was over. Obviously, this becomes a training issue at first so that the proper habits are established. Beyond that point, the book should get updated with one-off requests quickly so that camera room interruptions fall off quickly.

Make sure your minutiae cure is scalable

The studio owner came to me because they had a big studio and one book wasn’t enough. They needed multiple copies, but managing all the changes was a chore. Since most of the users were lusing Photo One all day, it made perfect sense to include the equivalent of “the answer book” within our software. That allowed anyone to get to it, plus the answer book functionality in the software allowed them to print a copy of the book so there were always printed copies available.

Resources like this can provide answers to questions, as well as step by step checklists or processes that allow the owner and managers to get things done the way they want, even if they aren’t available. One memorable example was “How to arm the alarm at end of day”. Do this wrong and you have no security or incorrect security. Do it right and the owner / manager gets some slack and the employee builds confidence in their ability to close the shop for the day.

A wiki, a FAQ, anything

These days, a custom desktop software feature like that really isn’t necessary because it’s so easy to build something like this into the private side of your company’s website as an internal wiki or frequently-asked-questions (FAQ) page. These assets are valuable not only for managers and your subject matter experts (SME) who get interrupted by such questions, but also for new employees or temps who come into your shop and need a resource other than “Ask Jennifer” umpteen times per week.

The last time I started getting overwhelmed by these things, I started writing down the context of the interruptions. That allowed me to see trends, identify what needed to be documented and get out of interruptionville.

Look beyond today, ourselves, our businesses

Recently, I read an article that provoked the reader to pay more attention to the big picture and look beyond the immediate meaning of day to day events. The premise of the piece was that “little”, seemingly unrelated events have repeatedly lead to regional or global events throughout history – such as the “minor assassination” of an Austrian prince ultimately led to World War I. It struck me that this premise also had business implications.

One of the core discussions in this piece was that we (as a species) often fail to see events coming, and that the path from point A to B seems obvious when historians examine them decades or centuries later.

While historians have the benefit of having the puzzle laid out before them, they claim that we (again, as a species) have been pretty consistent about three things contribute to our inability to detect these situations before (or as) they happen:

  • People tend to look at their present for answers, rather than considering the past or future.
  • People tend to look immediately around them, rather than analyzing how events connect regionally or globally.
  • People tend not to push themselves intellectually. Specifically, we don’t read enough, spend enough time thinking beyond the prior two points, challenge ourselves enough, and often tune out opposing views.

These are not accusations unique to today’s world, but observations noted repeatedly by historians dating back to Plato.

Look beyond the present

Let’s take that template of observations and use it to overlay our careers as owners, managers and employees.

When we look back, will we see some obvious signals that we missed over during our business career to date? For the things that stick out, would you do the same thing knowing what you know today? Do you feel you missed a signal or a piece of information that would have prompted you to do something else? Did you learn a lesson at the time that served you well? Months or years later, did a lesson hit you about those events?

Maybe there’s something to this, maybe not. Regardless of how your track record holds up under re-examination, the premise is worthy of consideration. How do the things that happened in the past impact current challenges? Do the methods being used to deal with these things hold up over time? Would your decision-making process or the execution seem naive, ill-advised, or not observant a year (or five) from now? If so, why?

Should that impact your execution and decision making processes? History says (in so many words) “yes, over all people and all times”, but everyone’s history varies.

Look beyond your immediate reach

Beyond your immediate reach, what is going on in your market? What’s going on in the markets that affect your suppliers (and their suppliers) and your clients (and their clients)? What events going on right now could affect you, your clients, their clients or your suppliers, even though they might be a layer or two removed from their day to day collective concerns?

For example, if you have a small party store, there are a number of things in the international community that affect you and your clients. Currency. International logistics. Regional conflicts. Tariffs. Trade agreements. A strike on the Long Beach docks.

Can you do anything about these events that are out of your reach? Probably not. However, you can use your knowledge of them to take action to protect your business and your clients’ businesses. Like it or not, you’re in their line of work as well, so paying close attention to what impacts them is important, even when it has nothing to do with what you do or sell.

Look beyond your norms

This one is complicated: read more, challenge yourself more, think more and review things contrary to your opinion. Yet it’s also simple and can be summed up in one word: Grow.

The single most important thing we can do for our business over the long term is to make ourselves better. A better read, better trained, better prepared, better developed business owner is more likely to make better decisions. That business owner sets the example for their team’s growth. When we have a deeper understanding of all sides of the challenges we face, and a deeper knowledge of the issues that affect our businesses and our clients’ businesses, we’re prepared to make better decisions.