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Business Series Installment 1
Imagine if you were on the outside of your business looking in. You are a consultant who knows how to ask the right questions and help the business owner find everything there is to find. You see a really good middle-market business, which makes a nice profit and has been growing at steady rate - north of 10% annually. The owner and team have created substantial equity value.
What’s not to like about this picture? This is a huge success story. The business owner has created significant wealth. A well-established, profitable business, that just keeps doing what it does, growing at an envious clip.
The opportunity has never been greater. There was a time when this entrepreneur didn’t have a big net worth. He had a vision, and created from that. Now, he does have a hefty balance sheet. Should his vision remain unchanged from when he was in his 30s? Should he, “the business”, and everyone in the business, just keep doing more of the same, running faster and faster?
The opportunity right now is MASSIVE! He is in his 60s, not his 30s. He now has substantial financial net worth, and can operate from a place of strength.
1. Opportunity within the company to make it bigger, better, more profitable, and more valuable. There is a lot to work with.
2. Opportunity for him to see the next chapter of his life, and create it. A chapter than can be way better than the one he is stuck in now.
Consider the lifecycle of the closely-held business. Dr. Leon Danco, one of my mentors, used to define an entrepreneur as 30 years old, flat broke, and just been fired! Most that I have met over the years chuckle and say something like “Yeah, I was pretty close to that.” You, the business owner, had a dream, saw an opportunity, or said screw this, I’ll go do it my way.
95% of startups don’t make it (1), but those that do eventually start to climb. This marvelous thing called positive cash flow arrives. Then growth, typically to hit a plateau or two along the way. Some climb on past those, some don’t. (2) (Reasons startups don’t make it.)
The business owner endures decades of dirty hard work, risk that non-entrepreneurs can’t understand, fear, stress, and more. He starts off as secretive. In the early years, if he shares how bad it is they’ll shut him down. He’s suspicious. You ask: What time it is? He replies: Why do you need to know? He’s harassed. He becomes successful, and with that success comes power. It’s his company. He’s unreviewed, by his very nature.
He reaches a point where the world has changed. The market is different, the competition is everywhere, he’s a little older. He’s a little tired. At least tired of the harassment – having to be responsible for everything, and having more people looking to him than he can count. He lives a good life, but there is a whole lot more he has thought about. Only thought about….
How can I speak this reality to a business owner? You grow, but you stop evolving. How many times do I see great businesses just like this one – filled with opportunity within the business, that is not being captured? Masked by the success created in years past.
Moreover, and please hear me on this one, a vastly bigger opportunity for the family owners to have what they would really want in their lives. I say “would want”, because they haven’t slowed down enough, and probably don’t know how, to even search that out. When they do get clear on what will keep them in smiles every day, watch out! It’s gonna be good!
Recommendation #1: Get some distance from your business. Write down 10 radical opportunities to evolve your business to the next level.
Recommendation #2: Do the same for your life, your time, those you love, the things important to you.
Recommendation #3: Dream big. Don’t fret about what it might take to get there. Put that on hold. Just be in that place of already having it all. How does that feel?
Through this series, I intend to walk through a significant family-owned business case study. I can see the business and owner changing in big ways, right before my eyes. They aren’t broken. They are creators, and you can see it on the balance sheet. This is the opportunity to create from success. To create a new dream even better, and with way more grace and ease, than the first one!
1. 95% of startups don’t make it.
2. Reasons startups don’t make it.
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