Transitions Digest

By Chuck Chrissis, The Growth Coach®

Equally important to thinking and acting like a CEO is the opportunity to become a sculptor of your business. Make time to craft and mold your business so it will run more effectively and deliver more consistent results. Actively shape and re-shape it to make operations smoother and more efficient. Turn chaos and confusion into order and discipline. Rising customer satisfaction and more predictable profits will follow. It’s time to standardize and document your business.

Challenge old beliefs about how your business should work. It’s never too early or too late to shape or re-shape your business. It doesn’t matter if your business is 20 years old, 2 years old, or still on the drawing board. Begin to mold the company to run without you being woven into its very fabric. Design it to run without you supplying all the energy and effort. You can’t control everything and everyone, nor should you. In short, behave like a strategic business owner. Let go!

Do this by creating more than simply a job for yourself. The ultimate goal of starting a business is to sell it one day at the highest possible premium to your employees, family members, or an outside buyer. You deserve an acceptable return on your time, talent, and capital.

No matter the size, age, or industry, every business should be prepared to be sold. Yours is no different. This “start with the end in mind” strategy should help focus you on building an effective business model that doesn’t have you at the center of its universe and doesn’t rely on your presence, personality, and perspiration for its success. In other words, you should not be the business and the business should not be you. This work-in-reverse approach not only maximizes your selling price, but minimizes the challenges and headaches while you own and run the business.

As mentioned earlier, your goal is to design and re-design your business to work without you. Your business model should be sculpted in such a way that it can be replicated easily and often in cities across the country and around the world. All that’s necessary is your vision, not your physical presence and exertion. Whether you intend to expand or not, such a goal will help focus you on building a systems-dependent, not owner dependent business that will generate repeatable performance and consistent results.  And you must get others to help. Without them you don’t run a business – you work a job.

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What is an effective business system? It is simply an integrated web of separate processes, procedures, and policies. A business system is your documented instruction manual for “this is what we do, and how we do it” at our company. A business system allows you to get consistent results through other people. What tremendous leverage and freedom that can give you!

Some typical operating processes are:

• Selling
• Marketing
• Manufacturing
• Inventory Management
• Order Processing and Fulfillment
• Customer Service
• Billing and Accounts Receivable
• Procurement and Accounts Payable
• Facilities Management
• Accounting and Finance
• Human Resources
• Information Systems

With such processes fully identified and explained, your employees will deliver amazing consistency by minimizing employee discretion. Such a system will also free you from having to touch every transaction, make every decision, answer every question, and solve every problem. You can manage by exception! Such a carefully crafted approach affords you breathing room to think and behave like a strategic business owner. You will also have time for the personal activities that matter most to you.

Without a business system in place, it’s unlikely you will be able to obtain a premium price for your business. A potential buyer may be unwilling to invest in an enterprise that is dependent solely on you for its day-to-day operations and survival. If it’s obvious that you are held hostage to your business, you may not realistically expect to achieve a sale price you find acceptable. If it’s obvious the business is systems-deficient, then it’s unlikely an objective third party will offer you a price that reflects the time and effort you have put into your business. Rather, emotion, not reason will come to rule the transaction and may very well derail it.

To maximize your company’s eventual selling price, realize that buyers want to acquire a smoothly-running, money-generating machine. They want to purchase a business system that runs on near autopilot. They want to buy a fully documented and organized business system that gets predictable results. They desire an asset with a proven track record, predictable revenue stream, and growth potential. Give them this by first taking the opportunity to step back, let go, and become a sculptor of your business.

 Let us know your insights by commenting on our blog post below.  

By Chuck Chrissis
The Growth Coach®

Subsequent issues of The Exit Planning Digest discuss all aspects of Exit Planning. The provider of this Newsletter (Holly A. Magister, CPA, CFP®) offers you unbiased information about what you may need to know. Subscribe to our free Exit Planning educational newsletter to learn more about how to grow and/or plan for your business exit.

Posted on October 29th, 2009 under Building Value, Business Growth, Entrepreneurship, Exit Planning Digest. Tags: business processes, coaching, Exit Planning, exit strategies, process of selling a business. Comments: None

Part 4

Recently I took my nine year old daughter and a carload of her friends to our town’s Volunteer Fireman’s Carnival for an evening of ferris wheels, funnel cakes, and laughter–of course!  It was a Friday night after a long week.  Truly, I would have benefited from a simple dinner at home to unwind from the week.  Sound familiar?  However, I intuitively knew that the laughter of those children was most important and desperately needed…so off we went.
 
As the girls were getting out of the car, they caught sight of the ferris wheel in the distance and the excitement erupted into chaotic squeals, giggles and laughter.  I found myself feeling a bit nervous for their safety as the other cars were moving in and out of the parking spaces nearby.  I regained their attention and reminded them that they promised me to apply the buddy system to keep safe.  All was well…
 
In typical fashion, the Fireman’s Carnival delivered all that was anticipated.  It rained all week, so the grounds were like a mud filled sponge and no amount of hay can fix that.  It always rains during the week the carnival comes to our town.  The children never take notice of the condition of their shoes.  It is all about the laughter. 
 
When I was nine, I loved carnival rides too.  Another mother and I were lamenting the fact that somewhere between the age of 21 and childbirth the ferris wheel went from thrilling to terrifying.  How does that happen?  I think it is just about the same time that we adults forget how to laugh. 
 
Among my successful Entrepreneur clients, I observe that they know how to keep all of their troubles in perspective.  Simply put, they have not forgotten how to laugh!  And given the times we live in, they have been laughing a lot!  Don’t get me wrong, they do not disregard reality or not take their business or life seriously. They keep perspective and know the value of childlike laughter! 
 
After an evening of laughter, it was time to return home with our funnel cakes “to go”.  Dad and big brother were waiting for them.  As we returned to our car, we found ourselves “in trouble”.  No, I am not kidding.  As we approached my car, a Policeman asked me if I was Holly Magister and if that was my car?  Never a good question when posed by a Police Officer!  His cruiser cornered me and my car in and his spotlight was squarely on me!  “Yes, officer.  What is wrong?”  I replied.  My panic-struck heart was pounding and my nine year old began to cry.
 
Truly, my first thought was that someone died and they were trying to find me to deliver the news.  What else could it be?  My daughter thought I was going away in handcuffs forever because that is what she sees on TV.  She never saw a Police Officer that close before–one that knew my name.  They were looking for my mom!
 
The Officer told me that “the white SUV next to me suffered a “door ding” and he was there to investigate the accident.”  “Is this truly necessary?”  I asked the young man who was standing next to his prized mode of transportation.  (Okay, if you have read my earlier blogs, you know that I ask this question a lot!) With no reply to my question, I asked it another way… “Did you have to call the Police?”
 
It turns out that the nine year old’s chorus of squeals, giggles and laughter muffled the sound of the “door ding” that the neighboring SUV suffered several hours earlier.  And the young man felt that he needed the protection of the Police to make certain that justice would be done.  This young man discovered his “door ding” and decided to wait for me to return to my car.  He waited more than two and one half hours! 
 
The Police Officer informed me that it was his “job to determine if the door ding was inflicted with malicious intent or by accident.”  I replied, “I do not know any nine year old that would have malicious intent of any kind and I am grateful for that!”  He was not pleased with my reply and further informed me that he “did not want this to get ugly”.  Regardless of the absurd situation, I decided to save my sharp tongue and sarcastic sense of humor so the Officer did not feel compelled to take me away!  Besides, the funnel cakes were getting cold.
 
Today, I learned that the body shop did not consider the SUV’s injury to be a “door ding”, instead it was a “paint transfer”.  And it would take only $554.73 to make it go away!
 
The white paint from the SUV that was “transferred” onto my blue car was undetectable after a $6.00 wishy wash at the gas station.  What a bargain!  But here is the best part…after my car was washed, the shine revealed no less than 11 “door dings”.  Real ones! 
 
As I share this story with you, and more recently my family, I am reminded of the numerous “door dings” we endure as Entrepreneurs, parents, and humans for that matter!   And I believe that it is the endurance and perspective gained along the way, not the removal of the door dings, that make the difference!  To know that the door ding the white SUV suffered was because of a child’s excitement and laughter put a smile on my face.  Are you smiling?
 
As for my door dings, all eleven of them, they are not going away!  They serve to remind me daily what really matters… endure, keep perspective and remember to laugh every chance you have!
 
Let us know your insights by commenting on our blog post below.  

Holly A. Magister, CPA, CFP
Enterprise Transitions, LLP

Read Previous Articles in the Series:

Part1:Troubled Waters Part 1
Part2: Troubled Waters Part 2
Part3: Truly Necessary in Troubled Waters

Posted on September 15th, 2009 under Building Value, Business Growth, Economy, Entrepreneurship, Exit Planning. Tags: Entrepreneur, Entrepreneurship, successfull entrepreneur. Comments: 3

By Holly A. Magister, CPA, CFP®

Do you know what is truly necessary?
 
With the multiple changes in the marketplace over the past six months or so, many Entrepreneurs find themselves overwhelmed.  They are reacting to client demands, changing vendor and employee relationships, increasing costs, and dwindling resources–financial, human and even their own energy.  They go home at the end of the day not truly knowing if they made any progress.  And that day was likely a 12-to-15 hour day! 
 
Does this sound familiar?  If so, know that you are in good company!
 
As you endure the chaos, it is impossible to have the insight to recognize what is truly necessary and what is distracting you from your best work and opportunities.  Unless, you stop and make a point of asking yourself “is this truly necessary?”
 
In many cases, Entrepreneurs spend inordinate amounts of time dealing with the matters that really mean the least to their future success.  And by doing this, they are expediting their failure.  Do you fear failure?
 
To ensure success, you must take time to reflect on matters that are critical and clearly understand and focus on the matters that are truly necessary every day.  As far as those matters that are not truly necessary, stop addressing them now! 
 
When you recognize how distracting those unnecessary matters are, you will quickly recognize the numerous expenses you will be able to eliminate when you let go of the unnecessary.  That is the good part!   When you eliminate the unnecessary, your life is simplified, some (maybe many) of your expenses are eliminated and your profit increases!  In my experience, “eliminating the unnecessary” has the potential to transform your business, your outlook as an Entrepreneur, and you.
 
Over the past few weeks, I have been sharing my insights through this blog series about how successful entrepreneurs are navigating the troubled waters we all share.  Successful Entrepreneurs are courageous as they consider their numerous options, they utilize their resources and eliminate the unnecessary.  And without exception, they understand the importance of the last principle…they find the humor in the situation.  In very simple terms, they laugh.  They apply this principle often!
 
I will share more about humor in my next blog posting.  In the meantime, stop and ask yourself “what am I doing today that is not truly necessary?”  Let us know your insights by commenting here.

Read the Previous Articles in this Series

Troubled Waters Part 1
Troubled Waters Part 2

Posted on May 20th, 2009 under Building Value, Business Growth, Economy, Exit Planning. Tags: Entrepreneur, Increasing Costs, Profit, Profitability, Simplify, Successful Entrepreneur. Comments: 1

By Holly A. Magister, CPA, CFP®

As you navigate these troubled waters, what resources do you draw upon?

Many good-intentioned entrepreneurs confuse being courageous (the subject of my last blog) with the notion that during difficult times they must become Lone Rangers in order to survive.  What I have observed is the truly successful entrepreneurs do the exact opposite.  They instinctively recognize the value of their resources and know exactly when to draw upon them for help.  Instead of retreating to their early days of entrepreneurship, where they were “rugged individualists” by necessity, they call upon the people, companies, and other resources from the past that have consistently provided them with “best of their breed” performances.  And if for some reason, they do not have access to such a resource in their time of need, they find them.  Someway, somehow they find them.
 
As your business is occupying its position in the marketplace today, the world is changing.  Really, really changing.  Stop for a minute and ask yourself the following question: “What is different today in my marketplace than one year ago?”  If you cannot list at least three differences, your head is buried in the sand.  And if that is the case, you have permission to stop reading this now.
 
With your list of three (or more) differences, you have the place from which you should start to work.  You must deal with these differences NOW to survive today AND thrive in the future.  This is where those valuable resources (old and new) become critical.
 
So how do you know if the resources you have drawn upon in the past, or are considering for your current and future needs, are truly “resourceful”?  Or do they simply go through the motions?  I recommend asking yourself if those resources have delivered, kept promises, or maybe even exceeded your expectations. Are they creative and capable of providing a point of view that may not be popular?  Is their advice, service and attitude one that makes you feel as if they truly are concerned about YOU?  The truly valuable resources in your world should not be afraid to make changes to the way they deliver their products and services to you.  They should be flexible, open-minded and capable of adapting to the troubled waters we are all sharing.  Technology and the knowledge base is changing and growing rapidly.   Your resources should be adopting these advances and excited to share with you the benefits from doing so.
 
One of my favorite quotes of Warren Buffett is “You never are hit by the bus that you are looking at.”  How so true, on so many levels!
 
The successful entrepreneurs that I work with have been run over by more than a few busses.  The difference between the successful ones and the rest is the attitude they carry as they react to the situation and the resources they have to draw from to help them.
 
Before you pull out your PDA to call upon your resources, we need to make certain you are applying them to the things that really matter.  And that leads me to the subject of my next blog–principal number three–Eliminate the Unnecessary.  In the meantime, think about your resources…Are they resourceful?
 
Read Trouble Waters Part 1

Posted on May 8th, 2009 under Building Value, Business Growth, Economy. Tags: Building Valuable Businesses, Business Growth, Business Resources, Economy, Entrepreneur, Growth Resources, Successful Entrepreneur, Warren Buffett. Comments: 1

By Holly A. Magister, CPA, CFP®

The first quarter of 2009 was brutal on virtually all fronts. During my twenty-five years of practice working with Entrepreneurs, I have never witnessed more chaos in the marketplace. Never.

Clients, vendors, employees and other resources that once were reliable relationships, a “known quantity” so to speak, have made moves that no one would have predicted–even 90 days ago. So, here you are…the Entrepreneur without a roadmap. What is one to do?

I believe that as an Entrepreneur you must apply four principles as you navigate these troubled waters…Find Courage, Draw from your Resources, Eliminate the Unnecessary, and Look for the Humor. Without doubt, looking for the humor may be the hardest principle to apply because nothing appears to be very funny at this point. We will get to that principle, however today’s blog is intended to highlight the first principle Courage.

In one of my recent blogs, I shared my belief that it is critical to Make No Assumptions. The first principal “Finding Courage” is necessary if you plan to “Make No Assumptions”. Not all Entrepreneurs are capable of making no assumptions and frankly the real winners are the ones who have enormous amounts of courage!

What does courage look like? In my travels, I have found numerous courageous Entrepreneurs. They know they must be brutally honest with people they love. Sometimes they must remove an employee that simply is not (and has not been) productive. Often they truly love that employee. I hear comments like “This is really tough, he is my son’s best friend since grade school…We all went to their daughter’s wedding.” But the truth is this employee is not cutting it and he is the bad apple in the barrel. You know who they are. You do not have to think about it for even a minute. Nonetheless, that bad apple is spoiling your barrel!

Courageous Entrepreneurs also know they are the driver of their business. It was their dream and their vision that drove them to start the business and it their passion that drives them to navigate these troubled waters today. They know they must follow their gut about clients, vendors, employees, and their other resources as they move forward. Yes, the input from others is important. However, the courageous entrepreneur knows deep down inside the people whom are valuable to them and their business.

One of my mentors is recovering from brain cancer surgery and continues to work with me as my coach. His incredible courage teaches me. As he was returning to his work with me only three months post-surgery, he wrote the following note and I want to share it with you: “Find the resources, make the time, come dressed to play, and be ready to win. If a fifty-six-year-old guy with a brain tumor thinks it’s important enough to dress up and come play, you should just come to see if I can still throw the ball.” He is the epitome of courage and one of my most precious Resources.

I will cover principal number two…Draw from your Resources…on my next blog. Until then, I know you will be courageous in those troubled waters.

Read Troubled Waters - Part 2

Posted on April 13th, 2009 under Building Value, Business Growth, Economy. Tags: Business Resources, Economy, Employees, Entrepreneur, Entrepreneurs. Comments: 1

by Holly A. Magister, CPA, CFP®

Have you notice lately, that what used to be “tried and true” is no longer?  It seems everywhere I turn, I am observing changes– major changes in some cases.  While this constant state of change causes many people stress, during such phases of major change, we grow the most.

Many complain about the stock market mess, unemployment applications on the increase, bad mortgages and foreclosures,  …I could go on and on…but I will spare you.  The truly resourceful people among us are fully engaged by the opportunities because they are making no assumptions.  And from only that position, they are clearing seeing opportunities.

Joseph A. Schumpeter, an Economist defined phases of massive change, such as the one we are experiencing,  followed by innovation as “Creative Destruction”.  I find his choice of words for what we are experiencing instructive.  In order for our economics to improve, all of our assumptions must be “destroyed” in order for us to be “creative”. 

Are you experiencing massive changes in your life and the world around you?  If so, then it is necessary to let go of those assumptions for progress to be made.

Every day I have the pleasure of working with some of the most wonderful, resourceful Entrepreneurs that I could hope for.  And every one of them is excited about the endless opportunities they are embracing every day.  Every one of them, without exception.  These Entrepreneurs do not need a government bailout or economic stimulus package to improve their situation.

They make no assumptions and find opportunities abound.

If the changes around you are overwhelming, stop and ask yourself “what are the assumptions that I am holding onto that are preventing me from finding the opportunities for my future growth?”  Be honest with yourself and you just may find yourself as excited about your future as I am.

Posted on February 6th, 2009 under Business Growth, Economy. Tags: Business opportunities, creative destruction, Entrepreneur. Comments: None