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Realize Your Desired Business Outcome Through “Considerable Planning”

October 28, 2014

Imagine someone you know who lives paycheck to paycheck. That person is probably unable to save any money because of the pressure of day-to-day survival. As a result, planning for tomorrow is a difficult or even unimaginable concept. This person has a “high tension” focus on simple survival. The survival mode cycle can be very long, depending on one’s circumstances.

One of the best business growth predictors involves considerable time and planning, according to the research paper from Manolova, Brush, Edelman & Shaver (2012)1. This is largely due to the owner’s desire to be in survival mode versus taking his or her business to the next level. The research found that most businesses don’t grow rapidly; instead, they grow over time in terms of sales, employees, market share, etc.

The longer you stay in this cycle, the less business equity value you have.

The less business equity value you have, the lower the probability you will be able to focus on “considerable planning” of any kind.

In my experience, I’ve found that privately-held business owners want to have a successful business cash out event—regardless to whom they sell—while still creating a win-win situation for both buyer and seller. However, according to economic expert Rob Slee2, there are some timing factors that must be aligned:

  • Business Timing: Does the business have a solid key management team that can operate with or without the owner or founder?
  • Economic Timing: Where is the economic cycle and its related industry trending in market M&A (Merger and Acquisition) movement (not performance)? Slee (2007) 3
  • Personal timing of the owner—the owner’s readiness to move on to a new challenge.

Recently, I was referred to Judy, who owns a successful multi-million dollar international company. She knew her market share was growing based on her well-built network, connections, and several other industry indicators. She also knew that she needed to focus on one core competency to continue building a competitive edge.

However, she fell short on her financials: While she knew her business was profitable, she did not know there was limited cash flow. You see, profits in business are like food and cash is like oxygen. Humans can survive without food for up to three days. But if humans go just ten minutes without oxygen, they face certain death. When the cash flow is tight, every intention of investing in your business’ growth gets delayed—further driving you from having a competitive edge.

Good planning starts with knowing where you are today and where you are going in the next three to five years. Every business owner should be constantly adjusting timing at every step during the growth of the business. He or she must spend time watching and thinking about economic timing to stay agile and competitive, to innovate, and to meet market needs.

How is your planning going? Do you know how to eventually realize your desired business outcome?

I would love to hear how you envision life after maximizing your business equity value. And I would love to help make it a reality for you.

Don’t cut your business and personal planning time short. Even as you age gracefully and grow wiser, you may still feel reluctant to spend time on planning and implementation. And you may think you know about business succession planning.

I challenge you to think again.

Reference:

[1] Manolova, T. S., Brush, C. G., Edelman, L. F., & Shaver, K. G. (2012). One Size Does Not Fit All: Entrepreneurial Expectancies and Growth Intentions of US Women and Men Nascent Entrepreneurs. Entrepreneurship & Regional Development, 24(1/2), 7-27.

Brush, C. G. (1992). Research on Women Business Owners: Past Trends, a New Perspective and Future Directions. Entrepreneurship: Theory & Practice, 16(4), 5-30.

 Morris, E. (Producer). (2013).

[2] Slee, Rob (2009). Midas Marketing: How Midas Managers Make Markets. Charlotte, NC: Burn the Boats Press.

[3] Slee, Rob (2007). Midas Managers: How Every Business They Touch Turns to Gold. Charlotte, NC: Burn the Boats Press.

 
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About The Author

Chia-Li Chien, CFP®, PMP; Exit Strategist for Women Business Owners at Value Growth Institute in Charlotte, NC. She is the award-winning author of the books: Show Me The Money and Work toward Reward and a faculty member of the American Management Association. Her blog and newsletter was named a Top Small Business Resource by the New York Times You’re the Boss blog. She can be reached at jolly@chialichien.com or 704-268-9378.

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