Through thousands of hours, working with owner/managers, we noticed a subtle sequence of challenges and opportunities as a firm grows, a business journey if you will. While every experience is unique, you might recognise some (or all of the following).
Go on, do it. You’ve been making money for other people for too long now. If you give them your big idea then, well, they’re going to make even more money out of you, aren’t they? Added to that, the politics drive you crazy, your colleagues are all miserable, and the faces on the daily commute, remind you what life will be like if you don’t take action.
Face it, you’ve got an itch and you’re probably going to scratch it sooner or later. Starting your own business can be one of the most liberating things you can do in life and a true privilege, most days. It can also be a rollercoaster ride straight to hell in the early months/years. Many start-ups fail early on and the reasons are varied.
The one constant in start-up stories is the ‘unknown unknowns’. Most people who start a business fall into one of two camps; great sales ability, or deep technical knowledge. Your primary objective at this stage is understandably survival but understanding how to plan, manage and grow a business can help you get through the survival phase and on to growth quickly.
You’re chasing a lifestyle and it’s just out of reach. You make good money sometimes, but it’s a constant struggle. If you want something done right, you still have to do it yourself. You can’t fully trust anyone in your business. You’re lonely, frustrated and fed up – you’ve hit the wall. To move the business forward you need to stop playing draughts and start playing chess.
You don’t need ‘big business’ but you do need to start planning strategically and executing professionally. In each key area of the business you need to build capability. A disciplined and targeted approach to client selection is a great place to start. This makes it easier to design a proposition that’s delivered consistently by everyone in the business and to align your teams with the proposition, through the development of robust processes and the promotion of accountability.
All this change requires multiple projects and in order to get them completed, you need to take a strategic approach to the deployment of resources, through some careful planning. You know how to delight clients and make money (would you have got this far if you didn’t?) and now you want to undertake the necessary tasks to move forward.
You’re on a mission now: you’re doing rewarding work, the team has momentum, together you’re generating plenty of revenue, overheads are growing slower than revenue, processes work well, and the profit margin is strong. And just like bees round a honey pot, opportunities will be coming in thick and fast from now on.
Huge growth is just around the corner, with recruitment, joint ventures, acquisitions and all sorts of other interesting propositions arriving in your inbox. This is the most dangerous phase for many business owners. Success has a habit of blinding you from reality and managing risk when you’re enjoying real momentum is a tricky task. Nothing fails like success.
The quality of your management team’s decision making is critical at this stage, so a shared understanding of the firms’ vision, mission, strategy and related projects, will help keep everything on track and allow you to add external resources to compliment the teams performance.
You’ve been running your business for years now and you wake up one morning, the knees are creaking, the energy levels are low and a fleeting thought enters your mind – “what else would I do if I wasn’t doing this?” It’s the beginning of the end. Before long you’ve thought of countless experiences you’d like to have, all away from your business.
The experience that awaits you is likely to be the most challenging of your career. You must determine what you are actually going to do once you’re out, discover what your number is, what exiting with integrity means for you, your clients and the team and all this before you get into the technical aspects of tax, initial vs deferred consideration, earn out’s and lock ins.
Everything is on the line and the interests of multiple groups of people, will converge at this point. It’s essential to take time to understand what everyone needs, before increasing your knowledge, planning carefully, hiring the right professionals and negotiating your way through the often-complex process of exiting a business.
Journey or Adventure?
A journey is something that’s frequently endured. It’s rarely fun, you just want to get through each stage and on to the next, with the ultimate destination as the goal. For many of the successful business owners we’ve worked with, they’ve treated their experience as an adventure and this altered perspective, has allowed them to view the experience as success and not the destination, dramatically increasing their enjoyment.