If you are like most business owners, you find it difficult to plan because your future has more unknowns than your non-business-owning counterparts. You might not know how much your business is worth, when you should sell, when you should buy an additional business or build a new location, where to find the right buyer, how to fetch the best price, or even how much insurance you need to carry. If you have a family business or operate with a partner or partners, you also have additional layers of both complexity and ambiguity.
When planning for the future, it is easy to become overwhelmed by all that isn’t known. Here are 3 tips I like to share with my clients on seeing a clear path to their future business success.
- Chart What You Know. When you step back and evaluate the questions marks that dot the path to your future, you might realize that not everything is unknown. The value of your business is a prime example of a discoverable fact, yet if you are like 98% of other small businesses in this country, you don’t know the answer. With less than a half an hour of your time, copies of your last three years financials and innovative technology that harnesses the power of big data, you can get an accurate business valuation to illuminate your path. The valuation will give you an understanding of how much your business is worth, how it compares to others in your industry (key benchmarks), and the levers or key performance indicators that could drive future growth of your practice. It’s an invaluable business tool and growth engine resource. Use it!
- Measure Against Bold Targets. Don’t settle for average or the benchmark, set your sights on measuring your company to bold, stretch goals that challenge you and your team. Whether you reach the goals or not, stretching yourself only gets you to perform better and who wants to be average anyway? Once you have the valuation and benchmarks, you can start creating realistic but bold targets that you can chart your success against. Then, keep measuring the value as you go. According to a Financial Planning Association/CNBC study, over 70% of small business owners have the majority of their wealth tied up in their business assets. Getting the most out of this asset is what successful business owneres do. What I have learned throughout my career backs up this saying, “Perhaps what you measure is what you get. More likely, what you measure is all you’ll get. What you don’t (or can’t) measure is lost” – H. Thomas Johnson. So start measuring and be bold with your targets!
- Take Action. Regardless of your goals or plans, if you don’t take action immediately against these targets you will get absolutely nowhere or maybe even stall out and go backwards. Therefore, it’s not just good to have a valuation completed, look at where you stand against the benchmarks and Key Performing Indications (KPI), and create stretch goals against them, you have to take action immediately. Even if your business is doing great, taking the right steps forward to expand your market or offerings at the right time can be critical to your success. Whatever your goals and targets are, create a solid action plan and follow through with that action plan to reach or exceed these expectations. As a small business owner it’s hard to hold yourself accountable and push to take some action steps without a solid support system in place working with you. Whether it’s a co-owner, partner, business coach, another business owner, or friend, be sure you have an accountability partner who can work with you on a regular basis to take the action you know needs to be taken. Someone who is unbiased and will tell it to you straight. According to The Alternative Board’s most recent Business Pulse Survey, 81% of entrepreneurs have seen a positive impact on their business from business coaching. Track your ROI (Return on Investment) and see for yourself.
As Lieutenant General and former Deputy Director of the CIA, Vernon Walters, once said, “Uncertainty is the most chilling thing of all.” To reduce the amount of ambiguity you face by determining the value of your largest asset, consider obtaining a business valuation and business consultation today. Here’s to measuring your big audacious goals and achieving them. I believe there is no bigger “high” than when you stretch yourself and see incredible outcomes working with an amazing team!