Here’s a simple question to any business owner, why are you in business? The flippant answer I often hear is to make money. An honest, if not inspiring answer, but there is a fundamental flaw in that statement which many business owners fails to comprehend. They start a business, typically through experience in, or a passion in the field or because they have seen an opportunity to make money, but fail to achieve that ultimate goal because they fail to plan their exit strategy.
If you can’t get out making the money you intended to when you sell up then why did you set up the business in the first place? You have a great idea, you work on it, and spend your energy (and life) building it until it becomes you. It succeeds and you enjoy the lifestyle it brings then the challenge of maximising that income to free yourself up and retire or dd something else with your success. That final stage often becomes impossible because you are the business and it is you, its lifeblood, main cheerleader and driving engine.
This typical scenario of being a business owner, is driven by the passion to run the business day-to-day overshadowing the failure to plan your exit strategy from the start. That is building a business with a clear objective to enable the owner to get out and maximising your income from what you have achieved. Nearly all business owners focus on building a successful business, not on making sure they maximise their returns from the successful ownership of the business.
The real payback from all that hard work in creating and setting up a business for an entrepreneur is the final payback, it is in the shareholder value being realised by a sale of that business. Few owners think about realising their shareholder value, being more interested in the Profit and Loss than the Balance Sheet when making key decisions about the business. That approach is effectively summarised in the phrase; the turnover is vanity, profit is sanity and cash is king, a great motto in the running of any business, but it does not hold true in achieving exit strategy success as a business owner.
Achieving shareholder success is the only motto to follow if you want to have a saleable asset, then owners need to focus of developing an exit strategy which achieve their personal goals. While profit and cash rule the day, building a valuable asset requires building shareholder value, through building sustainable long-term profitability
Success in business requires owners to build a business which you own but are not concreted into the foundations of its success. Building a forward strategy for your business is a vital first step in building your exit strategy, it is the old adage that you need to work on it not in it which underpins all successful entrepreneurs.
Short-term profitability is always an important goal, but long-term share value is a strategic consideration which owners need to consider in building the value of their business. If you would like to discuss this article further or further information about our services in working with business owners in achieving successful exit strategies then contact us at firstname.lastname@example.org or see our contact page for further options.
Business planning often gets a bad press, yet those who do sit down and plan their business are so much more focused, confident, and successful than those who float along with the economic tide. Successful leaders plan their business, so they can focus on leading their team to deliver that plan.
Over the past ten years as a strategic planner we’ve worked with hundreds of business owners and seen how those that create a plan and implement it, do so much better then those owners who try aimlessly lead their business on a wing, a prayer or a dream. successful leader’s plan their business, so that everyone knows where they are going what their role is in achieving that success.
According the latest BERR report, Small and Medium-sized Enterprises (SME’s) together accounted for 99.9 per cent of all enterprises, 59.8 per cent of private sector employment and 49.0 per cent of private sector turnover. SME’s really do matter to the British economy, and yet they receive little effective support from Government agencies despite being the backbone of the economy, employment, and innovation.
Why Business Leader’s Don’t Plan
“If you don’t make things happen, things will happen to you”Lanes Company
Having questioned business owners over the last decade the reasons why owners have not put a plan in place and executed it, the excuses range from not having the skills, make the time, or have the conviction of their thoughts. The number of owners who know they should have a plan ‘we had one when we first started, but have not looked at it since’ is a common theme, as is being too busy fire fighting to realise that preventing fires starting is the best way to not have to fight them.
Do business owners not see the value in developing a plan for their business? On the other hand, is the classic perception for business owners that frenetically staying alive is seen as being successful? For many not knowing how to plan is one major reason why people haven’t and don’t plan their business. Where to start and how to know what they are trying to achieve immediately puts people off planning. Business planning is also often at fault, the most common reason people have a plan is to secure funding from banks, that’s when banks did fund business start-ups (now they just offer a high interest mortgage backed by the Government). Therefore, once people have received funding they no longer see the main advantages of planning (and the real advantages are not around money).
Business Planning Skills – Have some GOALS
“The discipline of writing something down is the first step toward making it happen.” – Lee Iacocca
Planning takes time, resources, (grey stuff) not the executive trip to some exotic away weekend planning, but some time allocated to review where you are as a business, how your sector and industry are performing and what you want to achieve in the future. Whether it is looking at the next year or planning the next five years, everyone who owns or directs a business is responsible for setting its direction. However, just having a plan in your head, with the classic defence of ‘its flexible at the moment’ is either ducking the responsibility or deluding themselves.
The only way to have a plan rather than a dream is to have it written down, turned (if it is not already) into an action plan which is resourced and owned by someone to deliver. Only then do businesses go forward in a deliberate purposeful way. Only then do the right things happen because you made them happen and only then can everyone, employees, shareholders, customers, channel partners and even other halves, see your dream, share your dream, deliver your dream. That’s when planning works. It is a written document, which lives within your company, and it doesn’t matter if you are a one-man (woman) band or running a multi-national Plc.
What Business Planning Delivers
“In the absence of clearly-defined goals, we become strangely loyal to performing daily trivia until ultimately we become enslaved by it.” – Robert Heinlein
Planning provides focus in strategic direction, its provides clarity of where the business is and where it is going as well as a vehicle for getting from where you are to where you want to be. Planning time provides time to reflect on personal and corporate goals, time to share and channel new ideas while reviewing existing activities.
Planning in a structured and open format develops clarity of purpose and a clear understanding of the organisational and individual skills people have and can use to leverage advantage. Bringing in outside views widens the planning horizon, which can drive businesses forward, which is why many successful businesses use non-executive directors or outside specialists to help drive their business forward. That is one reason why so many people volunteer to get support from people like the Dragons from Dragon’s Den, they are looking for expertise and advice which gives them confidence to go forward as much as the money.
British business owners need to plan, more often to keep being successful. Good planning creates and sees opportunities as owners and directors lift their heads up from the daily grindstone. How often should you plan? Well it all depends on the speed of your market’s evolution, but even stable and stagnant businesses should review their business every year, and not just a light dusting (add ten percent and change the year) but strategically review what and how well they are doing.
It is only by looking for fresh opportunities and how to take best advantage of them, by planning your business around those opportunities that companies successfully compete in today’s business environment.
Business Planning is not a four letter word
“An organization’s ability to learn, and translate that learning into action rapidly, is the ultimate competitive advantage”Jack Welch
The old adage, compete or get beat, is more relevant today than it has ever been. The rise of the Internet means there are no secrets, competitive advantage lies with those who can see an opportunity and adapt fastest to take advantage of it. Those owners and directors who see and go for opportunities become the stronger ones, and that is where good strategic business planning provides it real advantage. That’s why successful leaders plan their business to achieve that success.
By orientating a company to where it can retain better, win new and develop existing customers companies that plan their success out compete in their sector, and equally importantly have everyone focused on where they are going. From the smallest to the biggest every business needs to have a plan that is written down, owned and guiding your business in the direction you want it to go.
The way you provide your product or service and to whom, says more about you than how much business you do. Being big in a highly segmented world is no longer the determination of success. How you do your business now determines your current credibility and future success. Credibility is as much about your values in becoming successful as about the success you have. Mohamed Al-Fayed for example, despite buying Harrods, never shook off questions about his background.
Your values as an organisation as demonstrated by everyone inside your organisation matter to both existing and potential customers in choosing to do business with you. People have choices and they can now exercise them more freely than ever before, and that means customers can access information instantly to make choices that are more informed. Ikea’s staff misinforming undercover Times reporters about their sustainable and certified sourced products at a number of shops are one symptom of Ikea’s rapid growth boardroom culture.
Values Must Live the Moment
Almost everything in life is in real-time and instantly communicated to circles of influence and beyond. A restaurant having bad night can have a poor reputation before the starter has even been cleared away as customers post live feed back to sites such as Qype or Trip Advisor . Therefore, before the waiter, maitre d’ or chef knows what’s happening the world outside already does by Twitter and Facebook and are cancelling their reservations in their droves.
Why clean lavatories matter?
The old adage that if you want to know how clean the restaurant kitchen is, inspect the lavatories, because they tell you how the restaurant values cleanliness, is a great example of modern customer awareness. Do you live your values or just post them on your website? Is the question customers want to know in establishing and experiencing trust with you and your brand.
Rail companies learning fast
The recent story of the man on the train talking too loudly causing enraged customers to Tweet complaints about his behaviour which was picked up by a duty manager hundreds of miles away who then contacted staff on the train to track down the loud caller and asked him to quieted down.
This story is very much testimony to the growing demands of customer expectations, immediate online response, not waiting for passing train staff to react. This story is part of the reputation shift that train companies are actively pursuing.
The values that a business lives really matter to customers and to the brand reputation.
Successful business planning is about developing your strategic plan for your business based upon proven business development tools. The Strategic Planning Workshop pulls these together into a single process, which takes the guesswork out of your business success.Taking the guess work out of your business success is a step-by-step process which develops business owners skills to strategically plan their business to take advantage of emerging markets, emerging trends, develop and launch new products.Strategic planning also enables companies to make structurally improvements to their business to improve its profitability, reduce costs and enhance productivity.
Strategic planning workshop is a proven method of developing and implementing success see www.cowdenconsulting.com
Slideshare of Strategic Planning Workshop (click to open).
Successful leadership is about vision, great leadership is about planning your business using business planning tools to match their ambitions to the opportunities in their market, using tried and tested planning tools.
Successful business owners step back to work on their business not in their business. Looking at where they are going and why. What are the opportunities within your market and sector over the next few years. Business Planning is a process of assessing options using tried and tested business planning tools, which provide robust and accurate options for business owners to grow their business successful.