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Employees Leadership Management Project Management

Have you tried managing?

If you talk to someone who complains that their company is out of control, the reason is not always obvious. Once you pin them down about the reasons for their problems, you’ll find that they aren’t managing. We rarely think we’re doing enough managing to deal with these issues. If pressed about whether we’re managing the cause of these problems, we’ll own up to it. We often know the problem and the solution. Despite this, we aren’t putting the effort into managing the root of the problem.

Managing is work

Don’t get me wrong. Managing people is not easy. It can consume a ton of time. Yet we all know the repercussions if we don’t manage. We do know those things, right?

So why don’t we do more of it? It’s not that we don’t care.

Even profitable, “well run” small companies doing $10-15MM ARR suffer from a lack of managing. While it’s obvious, we have a way of being terrible at dealing with the obvious.

A few questions to inform whether you’re managing:

Cash flow – Do you have a resource that tells you at a glance your cash needs are under control for the next 30-60-90 days? If not, you’re not managing cash flow.

Projects – To find out the status of all active projects, can you look at a single resource? Doesn’t matter if it’s a whiteboard, software, clipboards, or a spreadsheet. Or do you have to ask each lead for the project? Can you see which aspects of a project are on schedule and which are behind? Or do you have to ask each lead? Are you aware of the risks of each project and how the leads are mitigating them? For that matter, are the leads aware of them?

Hiring – Do you have a hiring process? How many hires do you make that you’re happy about after six months? What percentage don’t work out? How many start their own company after leaving you? What percentage of your non-leaders take leadership roles after leaving you?

Training – What routines are in place for new employee training? Is there a way for you to review every staffer’s training progress? What about the progress of senior staff?

Service – Can you review your customers’ happiness with your service? Without someone complaining, can you identify service opportunities that didn’t go well? Without asking someone, can you review the outcome of a sample of service calls over the last 30 days?

Sales – Which salesperson produces the least (or most) refunds? Why? Whose sales are the most profitable? Which one produces the longest-lasting customers? Who makes the most calls? Who makes the most of their calls? Is it the same person?

Marketing – Which ad medium has the best ROI for you? Which ad source produces the most profitable customers? Does customer lifetime value vary from ad source to ad source? Which ad source produces “bad” customers?

Managing – Without asking, can you tell how your managers’ teams projects are going? How are their people are doing? If you can’t do these things, neither can your managers.

What managing isn’t

Why are we bad at managing? For some of us, it’s because we learned managing from the wrong kind of manager. Some of us learned it by the seat of our pants. There’s nothing wrong with either method, unless you’re learning the wrong way.

One of the wrong ways is thinking that yelling at your team is managing. Do you or your team only think you’re managing when you’re angry? As an old friend used to say, “You’re doing it wrong.”

Micromanagement is a good example. It is not managing. While micromanaging is good for two year olds, it’s ineffective for employees. It’s not good for you or your company.

It’s not uncommon to see micromanagement at companies with management problems. Instead of managing they’re micromanaging.

You might be micromanaging if you’re:

  • Tracking time, not to track progress, but from a “butts in seats” perspective.
  • Not tracking time now and then to find out “how long a process takes so we know what our costs are” perspective.

I bring up micromanaging because it’s a good example of what managing isn’t. The worst part is that we micromanage and think we’ve been managing. Problem is, we still haven’t managed our team or the problem we want to solve.

Photo by Jan Szwagrzyk on Unsplash

Categories
Leadership

Your other important job

A friend commented this week that the tone of my writing has changed. They’re right. I’ve been challenging your leadership and decision making skills more than usual recently. I don’t mean you specifically… or maybe I do. These two responsibilities are the differentiators between “ok companies” and the good/great ones. Along with thinking, they are your other important job.

When I write on these two topics, I’m not only challenging you, but myself as well. They’re the topics I regularly consider during my nightly 90 minute dog walk. More often than not, that’s when these words begin to take shape. It’s definitely when much of my critical thinking gets done.

These walks are when I decide to discuss difficult topics you need to hear. They’re when I decide to suggest paying attention to something that might be off your radar. These are rarely topics a staff member will mention to you. Sometimes, it’s because they aren’t on your team’s radar. Frequently, it’s because you’re the owner.

I decided it was time to call more attention to them.

Should be obvious

The importance of these two responsibilities should be obvious. Yet they often get set aside for urgent but not important matters. I suspect you’ve read about what Eisenhower, Covey, et al said re: “urgent but not important” work.

I remind you about these responsibilities because I know how easy it is to get tangled up in the day to day. The urgent but not important is always lurking outside your office door with a “Hey, got a minute?”

When that happens, whatever you were doing falls off your radar.

Hopefully when it’s complete, you get back at it, but sometimes it can be hours. What were you working on six hours ago when your coffee was still hot?

I had to build systems around me to bring me back where I belong work-wise after the “interruption” ends. My observation over many years is that I’m not the only one who needs this.

I don’t mean your time as salesperson, bookkeeper, and/or payroll clerk isn’t important. Many of us spend time wearing other hats. When the work appears, professionals get it done (or delegate it). And yet, we need to circle back to the most important job and get it done. Whether you have zero or 500 team members, your most important job is leading your company.

Discovering the important job

It’s the most important work because everything else depends on it.
I don’t mean that other work isn’t important. It is. Product quality is important. Quality service and support are important. Having your numbers under control is important. It’s easy to get sidetracked by all these demands.

We can’t forget what’s most important: the business as a whole. Jack Stack, CEO of SRC Holdings nails this thought.

Asked what he’d teach his younger self, Stack said: “There was so much emphasis on products and services that there was no emphasis on the company. When you teach people how to build a successful company, you get better products and services.

His former employer built quality products, yet still went under. His takeaway? The CEO’s most important responsibility is to build a successful business.

Start and end your day there

When operating a business, it’s hard to stay focused at that level.

On any given day, you might be working on a product or service problem. You might be juggling cash so you can make next month’s payroll. In the crisis of the moment, that feels like the most important work. Maybe it is – until it’s completed.

If your company is small enough, you wear a lot of hats. Many of us are in that mode from time to time, sometimes a lot. I have those days too.

I find one of the most useful tactics to stay focused on this role is, at the very least, to start and end my day in that role. When I start the day in this role, I make progress on my most important work every day. Ending the workday in my leadership role re-aligns me, no matter what else happened that day.

The company, our customers, and the team have an implicit expectation of us. That is, we’ll show up in that role and take care of the business that takes care of them. Isn’t that what we promised?

“A professional keeps a promise whether or not they feel like it.”
– Seth Godin

Photo by Robert Gramner on Unsplash

Categories
Entrepreneurs Leadership

Time for thinking

How much time each week do you spend thinking about important things? I don’t mean baseball or fishing or camping or whatever (they’re important too). I mean thinking about the most important aspects of your business – whatever they are.

If it could talk, your calendar might argue with you about your answer. Take a look at it.

Does your calendar include time dedicated to considering your most important upcoming decisions?

Are there any slots set aside for thinking about other important items?

Is there time for discussing these items with your leader(s)? That’s important too – but that’s not the time for you to assemble your thoughts. That’s the time for you and your team to go over what came out of everyone’s advance thinking on the subject.

Do you think about these things on your drive home? Or while heading to the store or dinner with your family?

If that’s when your thinking happens, how distraction-free is it?

Do you remember any ideas or conclusions you arrived at during those times?

I’m guessing the answer is “No.”

Thinking is a duty

Thinking doesn’t demand “in my office, staring at wall” time – unless that’s what works best for you. The key is being distraction-free. Whether you’re fishing, walking the dog, paddling a kayak, or sitting in your office – the key is solace. Be alone with your thoughts. They need your full attention.

This time can be hard to come by unless you schedule it into your day or week. Intent is critical. “Got a minute?” has a way of destroying intent, or delaying it until tomorrow. One thing leads to another, and another – soon it’s six p.m.

If you’re a leader in the middle of an organization, these situations can be hard to avoid.

If you’re the owner, not doing this work for days, weeks, or months at a time is all but dereliction of duty. As owner, that’s your right – but is it right? Is that what you want?

Slow, turn ahead

One of the most important jobs an owner has is to be ahead of the curve. Considering and making decisions before they’re necessary. Waiting until the next challenge is in your face is not the ideal time to make complex decisions. Are there any other kind? Rarely, it seems.

These things sometimes take research. They take time to consider.

One of the worst parts is that they’re easy to forget. I suspect you’ve found a way to take some notes. At times, I’ve pulled over to make some notes while on a long, solo drive. At other times, I’ve called myself and left a voicemail.

We seem to learn the hard way how easy it is to forget that brilliant thought. Oh sure, we remember we were a little bit outside of Big Timber. But the thought itself? Gone. Poof.

The conversations we have with ourselves about important topics are often valuable. The results of our deep, focused thinking are too important to trust to our memory.

Too busy for thinking?

One of the things we get hung up on is the “busy” trap. We’re so busy attending to urgent but not important things that we forget about critical work. It’s on our todo lists, but it’s not scheduled.

Neither are “emergencies”, of course – but they get the attention they demand.

Sometimes we get sucked into emergencies even when there’s no need for us. Others are capable of handling them – yet we allow ourselves to get pulled in.

While this can make us feel like we’re important, needed, and critical to our businesses – we already are. Yet because we’re the owner, we get away with it. There’s seldom anyone with the gumption to say “Boss, we got this” – but if you look, you’ll see it on their faces.

It sends the wrong messages. Most of the time, you don’t need to be there. If they needed you, they’d ask. Being involved despite that tells them you don’t trust them.

That’s not the worst part.

If your senior staff did this, how would you react? You’d tell them to let the team do their job. Follow that advice.

Our most important job is to do the work no one else can do. Quality time thinking about the company’s biggest challenges is part of that work.

Photo by Anthony Tori on Unsplash

Categories
attitude Employees Leadership Management

Nothing is impossible

Back in ’95, I talked to my employer at the time about working for them from another location. Not from home, but from a different state. At first their response was a muted “Yes”. In retrospect, I should have drilled down a bit more into that reply. I didn’t because sometimes we hear what we want to hear. A few months later, I was ready to make that move, so I asked about firming up the details. As you might imagine, the “Yes” soon became a “Sorry no, that’s impossible for us.” Us meaning them, of course.

That “no” began my business journey. Sure, I’d cooked up a few small side hustles in years prior, but this was different. This had to be full-time. I needed the patience to build something real. I needed a plan. A random side hustle wasn’t going to feed the bulldog.

It seemed impossible.

Life advice

A few weeks before the “No”, I received one of my favorite nuggets of life advice from an older guy in Jackson Hole. He said “If you want to live here, you’d better bring your own job and your own woman because we don’t have enough of either.

When you get advice like this, it’s easy to wave off. We tell ourselves “Oh, it’ll be different for me.”

I was fortunate because he took the time to tell me his story. The short version: He’d moved his wife and kids to Jackson in the early ’60s. When their station wagon pulled into town, they had $200.

35 years later, he was doing pretty well, so I took him at his word.

We have trust issues

Distributed work has changed a bit since 1995. In early 2020, it was still “Sorry no, that’s impossible” in the view of many. Not because the technology wasn’t ready, but because we still have a lot of trust issues.

“It’s impossible to know if our employees are doing their jobs if they aren’t right in front of us.”, they said. We’ll circle back to that.

Add COVID. Stir. While our trust issues remain, we did what was necessary to get the work done.

Firms and services that never imagined succumbing to distributed work’s temptation (evil?) did so. They made it work. They struggled some, then figured it out. I watched my wife have Zoom-based doctor appointments.

Such things were “impossible” months earlier.

The impossible things

“Mark, there are lots of jobs that **are** impossible to do from home.” Indeed. It’s hard to take a CNC home. You can’t smelt iron in your backyard – at least not at scale. It’s tough to harvest crops from a distance. There are many more jobs like this.

The point of all this is not yet another rant about the pros and cons of distributed work.

It’s about how easy we whip out the word “impossible”.

We’ve convinced ourselves only Steve Jobs and Elon Musk can do the impossible. By the way, Steve’s been dead since October 2011.

Are those two guys are the only ones who can do the impossible? Or is it that they’re the only two who don’t give up before they get started?

While inertia and friction are contributing factors, the biggest issue is human nature. We convince ourselves something is too hard.

Or is it that we don’t want to do the hard things?

Are distributed workers working?

“We can’t allow distributed work. It’s impossible to keep track of what our people are doing”, they say.

Said another way, “Unless they’re at their desk, I can’t be sure they’re working.”

If you can’t be sure when they’re somewhere else, you can’t be sure when they’re at your shop. This isn’t about them. It’s about you.

Is it enough for someone to be visible to you for eight hours? That’s not work. It’s control. Except it isn’t, because that control is an illusion.

If your team’s work isn’t measurable, it doesn’t matter where they are. Butts in seats don’t change that. The folks wasting half their days can do that for months before anyone figures it out – and do so right under your nose.

It’s not impossible. It’s a choice.

Are you sure?

What else did you used to think was “impossible”?

What isn’t getting done, built, invented, or conceived because it’s “impossible”?

Photo by Alex Guillaume on Unsplash

Categories
Employees Entrepreneurs Leadership

Team building? Skip the hustle & chaos

I recently met an entrepreneur who recently discovered long-term planning. I don’t say this to make fun of them. I say this because it’s great and because some of you might be in the same spot with your team.

The conversation started with “The first time I ever thought more than four weeks ahead was today.” (in the context of their business)

If you’re thinking, “That’s not me, I have plans at least 90 days out” yet your team doesn’t know the details, it IS you.

This person’s business is growing and profitable, but their past sounded a bit chaotic. They commented that projects, and internal alignment were all over the place. Why? The plans, project ideas, and thoughts driving the business are all in the owner’s head – and nowhere else.

Yours might be too. You and your team might be burning time and money at a rate that isn’t necessary. If even productive days feel like chaos to your team, it IS you. Once you discover this, frustrated team members are no longer a surprise.

Old mindset, new mindset

They’ve left their “hustle” phase and now lead their business. Their discovery, not my assertion. They understand they were making execution as a team difficult and frustrating. It wasn’t intentional. They hadn’t learned what the team needed.

Most of us must learn this ourselves.

Until we do, we have false beliefs like:

  • Only I can do this work.
  • If only I work more and harder, things will change.
  • I must keep plans and ideas to myself until it’s time to do the work because no one will understand.
  • I don’t trust anyone else with my business / work / todo list
  • Unless I’m out in front leading the charge, nothing happens.

That last one… ever notice that the best leaders are at the rear?

They aren’t at the rear because they shy away from the action. It’s not easy for most to step back. Most entrepreneurs love to be right out there “at the front, in the teeth of the battle”.

The best leaders know that the well-prepared team takes the lead. Well-prepared teams know the mission, their purpose, the plan, and the expected outcome. Well-prepared teams don’t need you to get their work done.

Like a bottle rocket

We see the “hustle vibe” that some project. “Work longer and harder than the rest and you’ll get there.” Sometimes that’s true. Usually it isn’t.

Some project it to get “want-to-preneurs” off the couch. They enjoy guiding others to find their own independence. Many have something to sell. A few are charlatans.

“Hustle” too long and you end up like a bottle rocket. Burn all your fuel to get to apogee in seconds. Then what? An uncontrolled free-fall to Earth. Great for the Fourth of July. Not so great for your mortgage payment.

Many survive their hustle phase and figure out a better approach. Despite burning a lot of fuel (time and money) to get off the ground early on, they create a sustainable business.

None of the successful people projecting the hustle vibe work 18 hour days seven days a week. None of them work with no staff, no contractors, no leadership, and no shared mission / plan.

NOT ONE.

They still work hard… as a team. A group of people capable of functioning as a team does so when it has a leader rather than a VP of Team Chaos.

The VP of Team Chaos

Wondering why your team doesn’t seem to know what to do from one day to the next? Are they frustrated despite getting the work done? Do they hesitate until they get direction from you?

If you ask them “Are productive work days often chaotic and frustrating to you and the team?” is their answer “Yes”? You might be the VP of Team Chaos.

Want a recipe for chaos and frustration?

Mix the following ingredients:

  • 1 business owner
  • 1 team
  • “The plans, project ideas, and thoughts driving the business are all in my head” or similar

The entrepreneur is often the primary source of chaos. This doesn’t mean we’re bad business people. We tend to feed off the “chaos of battle”. Thing is, teams don’t. Chaos makes teams miserable even when they believe in the company and their work.

We have to lead. If that’s not us, we must find a leader and make it clear they have the authority to do so.

Work is a lot easier, fun, and more productive on a well-prepared team.

Photo by Mahir Uysal on Unsplash

Categories
Customer service Leadership Management

When obvious is invisible

Have you ever had an interaction with a vendor that you don’t understand? As in, “How could they be this clueless?” I had one of these conversations lately, and suspect I’ve been the subject of them as well.

Missing the obvious

A few weeks ago, a nice lady asked us if we would stop sending mail to her deceased husband. His account already showed “retired/deceased”. This was odd, since we’d not sent direct mail to anyone in over a year. We wondered if a recent email reminded her of a mail piece from that period. We send automated reminder emails when something’s about to expire. Since we filter retired and deceased people out before sending reminders, we wondered if we had a bug.

She didn’t call for no reason, so we started digging. We guessed someone had used an export from our customer system to create a mailing – and used the wrong export. One of our exports is for generic use. Mail / email work shouldn’t use that export, yet it happened.

Exports designed for that use automatically exclude people marked as retired or deceased. They’re not going to buy anything and they don’t want us to bug them. This intent wasn’t enough to avoid the problem.

Since a generic export is useful at times, we took a more assertive step. After the change, address info moves to a non-exportable location when this situation occurs. Ideally, this change allows us avoid this type of problem in the future – without deleting the info permanently.

I then asked the business office to reprocess everyone marked as deceased or retired. So we got that cleaned up and feel comfortable it won’t happen again.

You might be thinking this situation doesn’t apply to your business. It’s possible. It’s also possible you have a different flavor of the same problem.
For example, consider companies that do home improvement. They re-roof homes, (re)carpet them, or replace old carpet with hardwood floors. Do these companies send offers to addresses known to be rental property? Apartments, for example. Wasteful. Annoying. Obvious.

What you don’t ask

Last week, a group of long term customers (25+ years) were discussing a product from a vendor common to them. They were wondering aloud about fundamental aspects of the vendor’s product. The vendor has never documented or explained them, despite requests for that info.

As the discussion ended, I asked a rhetorical question. “How many of us have customers who are as confused about our products as we are about (vendor’s)?”

No one answered. We all knew the answer wasn’t one we’d like. Even so, what could have become a complaint session morphed into a valuable question.

Asking ourselves what’s right in front of us that we’re not seeing.

Wondering what our customers don’t understand about our company and our product. The reason is obvious. We’re too close to understand what we’re putting our customers through.

Question their obvious

I’ve listed some suggested questions at the end of this piece. I hope the questions are useful to you from a tactical angle, but they aren’t the point.
The point is that we need to be aware of how easy is it for leadership to miss issues obvious to our customers.

Suggested questions:

  1. What are we doing well?
  2. Is there anything we do that doesn’t align with the rest of what we do and how we do it?
  3. What annoys you about our business?
    Note: Some answers may identify intentional business components you don’t plan to change. That’s OK. Ask anyway.
  4. Is there a reason you’d hesitate to renew our service?
  5. Is there a reason you’d be uncomfortable recommending us to a peer or a friend?

My favorites are questions 2, 4, and 5.

The last two feel like they’re asking the same question. They are. The interesting thing is that they often get different answers. The first question brings answers specific to the customer’s situation. The second question produces more serious issues – often big picture items. These are often things customers accept as an annoyance they’ll tolerate. The price of doing business with you.

The only way to learn of these issues is to ask.

Photo credit: @Ev at Unsplash

Categories
Employee Training Leadership

Think like an owner

Jack Stack, of “The Great Game of Business” (GGOB) fame has a saying: “Share the insomnia”. In other words, if something is keeping you up at night, why not share that concern with your team?

To be clear, Stack does not mean that you should share something simply to scare or worry your team and provide them with no other information. He also isn’t suggestion you share the cause of your insomnia only when things are bad.

Instead, he advises that you not only share the concern you have, but also educate your staff (leaders and -all- front line employees) on why something is a concern, what drives that concern, which activities in the business drive the outcome you’re concerned about, what market activities impact this outcome, and so on.

This is the primary strategy that drives the GGOB. Imagine how it could change your business if everyone on the team truly understood how their work affected the company’s balance sheet and income statement – regardless of their role.

This isn’t as simple as handing someone a balance sheet and an income statement and expecting them to simply figure it out. Remember, I said “truly understood how their work affected” those documents.

GGOB isn’t a free lunch. Using it involves taking the time to educate your people regardless of their role about why these reports are important and how their department and their job directly impacts one or more lines on those reports.

I’ll bet a lot of owners don’t have that level of understanding about each individual role within their departments. Some may get it at a higher (departmental) level, but most don’t if you asked role-by-role.

As owners, we understand a team member’s role and why their work is important, but understanding specifically how each person’s work drops to the bottom line is another thing entirely.

Time and time again, I hear owners talk about how they want their people to think like an owner, despite their people having no skin in the game other than keeping their job. Sure, they may not be risking what you are, but they also have no shot at a piece of the reward. What should spur them to do anything other than what you told them?

Remember what you told them? “Just do your job.”

Some of us expect our team members to be internally driven like we are. While some are, many owners seem to expect it from everyone. If that’s you, you may wonder what motivates the rest of your team. A better question is “What motivates me?” Is it the possible return combined with the fear of the risk we’re aware of? Maybe it’s the sleepless nights (there’s that insomnia thing again).

If a team member is unaware (or not participating in) the risk, and they aren’t participating in the possible rewards, and they’re unaware of the reason why you have business-related insomnia, how can you expect them to act like an owner?

How can you expect them to think like owners if you haven’t told them how you think and how you make decisions? They aren’t mind readers.

Your people don’t know what you know (mostly) & they haven’t been asked to think about those things – and this often includes things that relate to their role.

When you grumble “Just do your job”, how can you wonder why you can’t get them to understand why the company’s scrap rate matters? Have you bothered to explain in detail how scrap rate affects your COGS, profit margin, etc.?

They can’t unless you explain it.

When you say “just do your job”, are you surprised that’s what you get? You didn’t tell them to “act like an owner” and explain what you think that means. Unspoken expectations are poisonous.

Explain how their work falls directly to the balance sheet and how that impacts the company’s ability to keep them employed, improve their pay and benefits, regardless of role.

Once a part timer sweeping the shop understands that the 39 bolts they tossed in the trash each day cost $1000 a month (at $0.86 each), they understand why it’s important to the company to pick the bolts out of the dust pan. $12000 a year important.

With that education, no job feels meaningless, regardless of role. That’s when people start to think like an owner.

Photo by Etienne Girardet on Unsplash

Categories
Employees Leadership Small Business

Adaptable to change?

Last week, we discussed ways that employees could make themselves more valuable to their employer and thus, more likely to keep their job. These were focused on how many owners / managers look at their team when things are tight. When things are tight, reducing expenses is always on the table – and rightly so.

We see this done poorly by large corporations on a regular basis. The news will mention that some large company laid off 30,000 workers at one time. It’s hard not to wonder who is managing a business that suddenly figured out they had 30,000 “extra” people. A company doesn’t often find itself in this situation overnight and it’s rarely a secret inside the company when you’re on the way there. Sure, there may be changes happening in your market, but you don’t wait to take action until your only next step is letting 30,000 people go. A company’s leadership shows whether they are adaptable to change, are stuck in denial, or somewhere in between.

That gets us back to keeping your job. One of the angles I didn’t discuss last week was that the likelihood of your continued employment (read: value to your employer) may depend on your demonstrated adaptability to change.

Change never stops

It’s a permanent fixture. Some will pretend nothing has changed or will attempt to take their company back to some magical time in the past, but they are fooling themselves. And yet, these folks exist.

Look back 10 or 20 years in your industry. Has nothing in your business changed? Even the most “primitive” supposedly low-tech businesses have changed in some way over the last couple of decades. How you as an employee respond to changes is everything. Your ability to adapt to change is central to your value to a company. This responsibility to be adaptable doesn’t end there. More than ever, your responsibility extends to your own career.

What do employees see?

When you look back at businesses that failed – regardless of size – one of the major turning points was their inability to recognize change – or their outright denial of approaching changes.

If you see a lack of response to clear and obvious changes in your employer’s market, you’d better be aware of what the company is doing to deal with these changes. If nothing appears to be happening, ask – carefully – about the company’s perspective is on a change that’s become obvious to you.

Don’t position it as criticism. You may not know what has been researched, decided upon, or planned in response to the change. The situation may be top of mind for your company’s leadership.

You may be able to detect this during your conversation. It may become clear that they recognize it and are planning (or taking) action to deal with it.

Alternatively, you may get a vague answer to your question about this change. You may be told “Good question, we’ll talk about that in our next full staff meeting. Thanks for bringing it up.” As long as those gatherings (virtual or otherwise) happen reasonably often, have patience and take action based on how that discussion goes.

On the other hand…

If your question is dismissed as if you don’t know what you’re asking, or you get a response indicating the conversation is over, you need to think about what this change really means. Maybe you misread it. Maybe they misread it. Either way, you need to find out which it is.

Look around and find out how it is affecting your competitors – not just locally, but in a handful of places. You may have to track down industry-wide publications and see if this change is being discussed. Call a competitor’s sales number and ask them about the change you’re concerned about. Don’t accept their response as the be-all, end-all, but file it with everything else you’ve learned.

That’s not my job

Why does this matter? Because you need to figure out if the change risks your career and financial future. Yes, a little bit of Captain Obvious – but this is on you. With very rare exceptions, no one is coming to save or protect your career – except you. It IS your job, like it or not.

If you’ve found yourself employed by a company that isn’t paying attention, you might be the next layoff – no matter how valuable you are. It’s on you not to be surprised.

Photo by Tim Stief on Unsplash

Categories
Business model E-myth Entrepreneurs Leadership

Selling your boomer business

I recently received a note from someone who read “Boomer Business For Sale“. They had some questions about different aspects of selling their business, and I suspect they aren’t alone, so let’s address them here. The premise of the original discussion was that there are roughly 60,000 boomers who are getting ready to retire who are also business owners, and that either someone is going to buy those businesses, or they’re going to disappear. I see this happen with increasing frequency and find it such a waste. These businesses aren’t disappearing because they’re unprofitable. They’re disappearing because they can’t find a new owner.

Recently I saw where a beloved 57 year old butcher shop in Missoula closed. A butcher shop doesn’t stay open that long if it isn’t doing things right – yet… no buyer.

If substantial numbers of these boomer owned businesses disappear, it’ll have an impact on the towns where they live, the people they employ, the people whose businesses they buy supplies and equipment from, the accountants, bankers and attorneys they use – and the revenue that feeds in other businesses.

Ideally, we (as a whole) would benefit if we could reduce the number of businesses that close rather than changing hands. Ideally, we (as a whole) would benefit if we could reduce the number of businesses that close rather than changing hands.

How do I find a buyer?

One of the questions I was asked was about how to market the business that’s for sale. In a word, carefully. Your first thought might be a business broker. In my experience, they should be your last resort because most of them put too many obstacles between you and the prospective buyer.

For starters, don’t put a “For Sale” sign out front. More often than not, tells people “We’re about to close”, which will give some customers the idea that they should look elsewhere before it’s too late. That’s not going to help you in the short term, and it’s not going to help whoever buys your business. If you find a buyer, they’re going to have to win some portion of that business back – and if you have a piece of the future, you’d prefer they didn’t have to do that.

You’ll encounter three types of prospective buyers. Some are buying a job and an income. While that’s fine, many of them will have little / no experience running a business. They will almost certainly want you to owner finance. While there’s nothing wrong with owner financing (in fact, it’s a great way to get your asking price), you’re going to be more concerned offering financing to someone who doesn’t know what it feels like to cut payroll checks, lose sleep over business issues, and deal with grumpy customers – while still keeping them

Other buyers are typically looking for an investment. Not private equity, but experienced business people who want to add to their business portfolio. They own businesses for a living.

Finally, there are competitors and complimentary businesses (the ones two or three towns down the road are good candidates). An in-town candidate is OK, but revealing your sale plans to an in-town competitor can create problems.

Don’t forget competitors

Of all the competitors and complimentary businesses in your market, which of them deserve your business? Which of them are good enough to take your business on and not embarrass you? Why? If you see your best customer in the grocery store six months from now, are you going to be happy to see them, or are you going to turn and go down another aisle?

If you sell to a competitor, you want to sell to the one who isn’t going to make you change aisles. Even though the check is cleared and you’re completely uninvolved in the business, you’re part of that community, and you don’t want to be embarrassed by the buyer’s behavior.

I’d look first at investors, as well as competitors who do what you do, but not in your community. Maybe they have a similar service three towns down the road and they’re looking to grow their business. You could have an intermediary (banker/lawyer) contact them to keep your identity under wraps at first. They don’t need to know whose business it is to examine your financials – which they should ask for very early in the conversation.

Training the new owner

If you’re actively working in the business, you’ll have to train someone to take over that job. In a business where the work is physically demanding, you might be tempted to limit candidates to people who are physically capable and willing to take on that work. If you do that, it’ll reduce the size of your pool of potential buyers.

Unless you are selling to a competitor who doesn’t need to be trained, training will come to come at the worst possible time. You’ve mentally decided to get out (and were there for months before selling), and now, you’re obligated to train this new person. Your sale isn’t really, truly final until that work is done.

The new owner may not even know that they like it yet. Perhaps they’ve done it for someone else for 15 years, and they think that’s what they want to do but they don’t know until they actually run / own it. What if it takes longer than expected? If you walk away, it could damage the business. If you have a fee for additional training in your sales deal (you should), then that still commits you to even more time.

This all started because you were ready to retire. Now you’re spending time training this person and may have to silence the “I should have kept it”, “They don’t get it”. “Will they ever learn?” thoughts. Prepare for this.

Are you really ready to retire?

The idea is that this group of 60,000 Boomer business owners is ready to retire. Are you really? Do you know what’s going to occupy your time once you cash out?

I’ve had conversations with a number of people who retired and were thrilled that they fished, hiked, and golfed every day for three months.. until they got bored. Some people don’t get bored with it. Some might cut back to every other day. Still, some are not cut out for 100% leisure.

A better question might be “Are you ready to sell, or is this about getting out of working every day?” In a business where the work is physical, it’s easy to understand the desire to back off at some point. Our bodies start telling us that they aren’t 29 anymore. Maybe climbing ladders isn’t as easy or fun as it used to be.

You don’t have to go from “I own it / work in it every day” to “I have nothing to do with it.” There are other choices.

Maybe a competitor is better?

Selling to a competitor or complimentary business should be an easier exit. Someone who is already successful and in a similar business is more likely to be able to organize the resources needed to buy you out since they’re already successful and have clientele in that market.

Somebody who owns a competitive / complimentary business is more likely to stick with it. They know what they’re getting. So if you do get to a point where you agree for at least a partial owner finance, a competitor / complimentary business is a better choice.

Don’t get me wrong, there are highly motivated, sharp people out there who are looking for an income and a job, and they’ll have bigger dreams than just buying a job. Maybe they’re going to buy yours first, then buy two or three more, and maybe make an empire out of it. You’ll know when you meet one of them – and you’ll know who is real and who is blowing smoke.

The real pain of selling

If you ask business owners who’ve sold their business, they’ll probably mention that due diligence was a pain. Someone doing proper research isn’t intentionally making it a hassle, but it’s a lot of preparation to satisfy due diligence questions. Be prepared for that before you say “It’s for sale.” Ask your banker, attorney & someone you know who has sold / bought a business recently about the processes. Prepare in advance, as it’s not fun to do that work under deadline when you have a buyer at the door, checkbook in hand. The last thing you really need is to feel the pressure of “I’ve got to produce all these documents and all these numbers under a deadline before they go buy something else.”

All this information should be available if your managerial accounting & business metrics are under control, but they usually aren’t.

Consider being an owner

This whole selling a business thing is complicated, isn’t it? Now you know why a lot of businesses simply close. Selling a business is work. It’s usually worth it, but it isn’t easy. And yet, it’s possible to avoid a fair bit of the work we’re discussing.

Some of you have been running a business for a long time. Some have been working for / in the business, as well as owning it. Running it and working for it are not the same. If you have to get in the truck every day and go out to a job site, or open the computer and stick your face in a spreadsheet or programming tool in order for your business to get paid, you’re working for the business, even if you own it.

It doesn’t have to stay that way. If you’re not sure about the pain of stepping away, consider finding someone to take on the physical part of the job. In that mode, you’re hiring skilled people for a specific job (as opposed to “business owner”).

For now, let them do the work. Do nothing but manage that business. Once you see what it takes to manage the business day by day – while doing nothing else – then you can easily identify the skills needed to bring on a manager. Perhaps you look for a manager who is interested in owning the business, perhaps in partnership with the person you hired for the “skilled position”.

Test your team – and yourself

At some point, you should have systems and processes setup so that the skilled person is handling whatever “working for the business” work that generates revenue, and your manager is… managing. Get things to the point where you can take off for three weeks and disappear (or so they think – if you need that at first).

Because you still own the place you’ll want to have internal controls in place. These inform you and your manager that everything is where it should be, running as it should be, etc. Combined with a few metrics, you can watch the business from afar.

What metrics? Think about a few pieces of info from each department that would allow you to sleep comfortably knowing your team has everything under control. Even if you don’t see them as “departments”, they still exist. Finance and Sales exist even in the smallest of companies. You already know what metrics are important. Now consider what’s important at a distance.

Finance: What’s AR look like? What’s your free cash look like? Are any payments overdue? Are we current on tax filings?

Sales: What was revenue last week? Last month? How many bookings do we have for the next 30 / 60 days?

Even though you could get the numbers yourself, a regular report from your manager that provides these figures and advises what they’re doing about them will be useful for non-distracted time away from the business and quality sleep.

Still uncomfortable? Still can’t sleep? Maybe the wrong manager. Maybe insufficient systems or metrics. Get with the manager and get to the bottom of what’s uncomfortable and have them patch that hole.

One thing to avoid, unless there’s no choice – avoid getting back into the weeds. Guide your manager through the weeds. Have them guide their team through the weeds. Don’t get into them yourself.

You have options

For the short term, ownership can be an easier option. You can be involved with the business when they need your expertise, while stepping off for a while to determine what your future looks like. All the while, you can take a distribution from the business, even though it may be lower than what you were taking before.

You’ll still have all the equity until you decide to consider your next step, like selling the business to your manager and lead “do-er”, or selling it to someone else.

The unanticipated reward is that a business that no longer requires you to be there every day is worth more and is easier to sell. Until that day comes, it’ll be easier on your mind and your back.

Photo by Jonny Caspari on Unsplash

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Entrepreneurs Leadership Management

React, respond or rebuild

What’s on your agenda these days? Whether your business is scraping by or flush with cash, you’re probably spending a little bit of time thinking about the future. Which future would that be? Next month, post-tourist season, post-COVID, or some other future? You might be thinking about how to react to this or that, or how you’ll do business until COVID is over, or something else more specific to your business and how things may have changed since mid-March.

React vs respond

The difference between react and respond has been on my mind a lot lately. The challenges businesses face don’t change all that much, until they do.

Remote work is a great example of this. For decades, “managers” insisted remote work couldn’t be done at their business. Suddenly, in the space of weeks, remote work somehow became possible. To be sure, it’s a challenge when you have a house full of kids, but a lot of people have made their way through that maze to a productive place.

When someone who manages people working (most) desk jobs says “We can’t do remote work”, it’s usually a reflex reaction to a perceived threat – the loss of control (as if they have ‘control’). Control is rarely what anyone thinks it is, if it exists at all. “How will I know if they’re working?” is another decades-old symptom of this.

Getting back on track, when you react, it’s typically a reflex. A reflex action logically gives control to whatever stimulated that reaction. While there can be a measured reaction, for the purposes of this discussion, I’m calling a reaction something you do that’s driven by instinct or reflex. In other words, the fight or flight amygdala is driving based on a perceived fear, even if you aren’t escaping physical danger.

When you respond, it’s something planned, measured, and (hopefully) well considered – again, defined for purposes of this discussion.

The future’s on our minds

The future might be on your mind. Is your business facing challenges that could kill it in the next quarter? The next five years? The next 20 years? Your company’s ability to deal with the speed of change might be involved, or it might be something simple like a technology you depend on that’s likely to be displaced over the next decade.

You might not care about that when it comes to forecasting next quarter’s revenue, but it could definitely impact the valuation of your business for sale in a decade. It’s easy to wave that off today when you’re worried about making your nut this month. Trouble is, these things can’t be planned for or implemented overnight. They require consideration well in advance, particular for the large number of business owners who view the sale of their business as the source of funds for their retirement.

Assumptions vary in quality

The quality of your consideration before a response occurs is everything. A lot of our consideration during this process is based on assumptions. Your assumptions might be good, true, dated, false, dogma-driven, ego-driven, and so on.

Question every single assumption that drives your plan / direction for the future. It’s painful when you find one is no longer true, but it’s better to learn that today than five years from now.

Is something still profitable? Prove it to yourself. Is something not profitable? Prove it. What should you stop doing? Does the data back up these assumptions?

Take everything down to bare metal. Make it prove itself true or false, valuable or not.

Once you arrive at what you think are your truths about the business / market going forward, it’s time to assess your current solutions and decide if they get to come along as you move toward the future.

What about rebuild?

One thing we haven’t discussed is rebuild. Going back to the assumption discussion, what if all your assumptions, experience, and knowledge are signaling a future much different from today? What’s your next step? It might be rebuild.

A rebuild is a form of response, and it’s also a longer term effort requiring even more consideration about what is, what no longer is, what never was, and what your forecast as what will be.

This thought process can be useful when things get tough, really bad, or perhaps a little weird and you’re trying to figure out how to move ahead given your forecast of whatever you think life looks like around the next curve.

Photo by sangam sharma on Unsplash