The odds are that most business owners will shut down their business as a worthless legal entity of no value. There will be no big payday, no strategic acquirer on the horizon.
Why are so many of us predestined to fail so miserably?
One reason it seems we are almost programmed to fail is that there is no instant gratification associated with building value into a company. Unlike developing a new sales approach, where you can see the tangible results of your efforts within weeks on a P&L or sales report, polishing a business to sell can take years, and there is very rarely a feedback loop that shows the owner he or she is moving in a positive direction.
What's worse, some of the moves necessary to make a business more valuable make it less profitable in the short term – meaning the owner only sees negative feedback signs such as his margin dropping, cash fading or the bookkeeper asking uncomfortable questions.
When your only feedback is negative, is it any wonder that most owners focus on other, more time-sensitive opportunities that give them an immediate adrenalin rush?
Author and businessman Stephen Covey provided us with a framework to think about how we spend our time and warned of the dangers of ignoring what is important yet not urgent. (The accompanying graphic illustrates Covey's four quadrants with respect to spending our time.)
His central idea was that how we spend our time ultimately defines our results. Covey encouraged us to think of our tasks along two dimensions: urgency and importance.
Covey warned that we all naturally deal with things that are urgent and important first, but it is what we do next that defines our ultimate success. Once the important fires are out, most of us switch to tasks that are urgent yet not important because we get a mini-endorphin rush from completing each task.
Covey went on to say that the most successful and effective people spend the majority of their time in the top right quadrant, which focuses on projects that are important, yet not urgent.
Thinking strategically about your business is top right stuff. It's the time you dedicate to thinking about where you're going to be in five years.
It's also where you contemplate the strategic alternatives for your business: what your business is worth, to whom and why?
Very few of us have the ironclad discipline to carve out time to think about what is not urgent, yet important. It is why I'm a big proponent of hardwiring your strategic thinking time so it can't get bumped.
For example, Bill Gates reportedly still carves out one week per year for his “think week,” where he has no agenda other than to read and think.
In the old days, his think week was dedicated to plotting the future of Microsoft, and Gates banned both family and employees so that the time could be his alone. Some pretty big ideas came out of think week, such as Internet Explorer in the mid-1990s.
These days, he still takes a think week but uses the time to strategize his philanthropic projects.
Richard Branson says his best thinking is done at Necker Island, thousands of miles from the daily interruptions of his Virgin Group headquarters in London.
Two times a year, I spend time with consulting peers at Gazelles International, training on new concepts and spending time to think strategically how to build our businesses.
The secret is that the time has to be carved out in advance and is non-negotiable. Commit and go.
Tom Garrity is managing partner of Compass Point Consulting LLC in Bethlehem. He is a certified coach with Gazelles International and a certified exit planning adviser with the Exit Planning Institute. Compass Point provides growth and business transition consulting to small- and medium-sized businesses. He can be reached at 610-336-0514 or firstname.lastname@example.org.