Ready to Retire & Sell Your Business?

Sell your businessReady to Retire & Sell Your Business?

Between 1946 and 1964 Americans created 78 million new people, whom we now call Baby Boomers, or Boomers for short.  Those 78 million people believed that the ticket to the American dream was to get a college education and work hard.  And they did in record numbers, growing our college educated workforce from 6% to 24%.  That created a tidal wave of applicants for corporate America that it just couldn’t absorb.  So, Boomers did what Boomers do, continued their endless march for upward mobility by striking out on their own and starting their own businesses.

Today, the first wave of those Boomer business owners are turning 65 and getting ready to retire.  They’ve worked hard for 20-30+ years to build their businesses, and they’re ready to have someone younger who wants the same things that they wanted when they started out, to buy their business so they can go enjoy the retirement they’ve always envisioned.  Problem is, the next generation, Gen Xers, have very different values than Boomers.

Boomers are workaholics, who grew up as the first generation having a common experience of TV advertising to drive their transformation into consumers of bigger better best of everything.  They own 50-60% of small businesses in America, and are consumers for each other’s products and services.  Gen Xers on the other hand, grew up using debt for everything they buy, and see work as nothing more than a means to get the lifestyle they want.  They are not interested in working long hard hours, and they don’t save so have no capital to buy a business. They see their personal happiness as their number one priority.  They don’t equate what they do with who they are like Boomers.

The 48 million Gen Xers will have little interest in a brick & mortar operation that requires them to be on site or on call for most of the hours of the week.  Since they have no capital, they will need financing to buy your business, so if your cash flow isn’t enough to support financing, you’ll also have a hard time selling it to a Gen Xer.  If they do like your business, and can get financing for it, it’s still a buyer’s market; the market will be short by about 20,000 Gen Xers per year to buy the hundreds of thousands of Boomer businesses to be sold over the next 20 years.

To make things even more challenging, corporate America is catering specifically to the needs of Gen Xers by offering things like flexible hours, job sharing, working remotely, additional paid time off, and flexible benefits.  These perks are tough for small businesses to match.

If you’re a Boomer who wants to sell your business in the next 10 years, what do you do?  If you want to be one of the few who successfully markets their business, maximizes its value and minimizes taxes, it’s imperative that you have an exit plan.

What’s an exit plan?  An exit plan is a strategy developed with the assistance of a team of professional advisors who are experts in their specific area such as wealth managers, attorneys, CPAs, insurance brokers, business brokers, business coaches, and business valuation experts. You’ll look at whether your best option is to sell your business to family members, company employees, or a 3rd party.  Then your team of experts will help you create your strategy for what is likely the biggest and most important single transaction of your life.  Don’t leave it to chance!

To learn more, attend our next seminar.

Set Goals to Crush The Competition

Why Set Goals?

I spent the day yesterday with some of Orange County’s smartest small business owners.  Why are they the smartest?  Because they took nearly an entire day to step out of their business to work ON their business.  They set goals and created their action plan for the next quarter.  And because they do this every quarter, they will always beat their competition.

In the process, they also learned how to be better business owners, and that is even more important.  As Jim Rohn said, “Work harder on yourself than you do on your business”.

In his book, “What They Don’t Teach You at Harvard Business School,” Mark McCormak made an interesting discovery about a graduating MBA class. Within the group, 3% had written goals, 13% had thought of some goals and the balance were just thrilled to be out of school (I am sure you remember those feelings).

The interesting part was what happened ten years later.  The group that had non-written goals were making TWICE in the field compared to the 84% of those who had none.  The group with written goals was making TEN TIMES what the other 97% were making on average.

Writing your goals down is critical to achieving them.  It does several things. First, it makes them real.  When you can visually see something, and keep it visual (not locked away inside your computer) it becomes more real and you’re that much closer to making it a reality.

Second, it tells your brain that your goals are important to you through your Reticular Activating System (RAS).  Your RAS is the filter through which nearly all information enters your brain, it controls your attention.  For survival purposes, it responds to your name and anything that looks like a threat. It also alerts you to anything new or out of the ordinary.  The great thing about it is that it works automatically – but you do have to tell it about your goals, by writing them down, and reading them regularly.  Detail out the steps necessary to accomplish them.  Then your RAS will recognize them as important, and it will go to work for you, allowing through anything that looks like it could help you achieve your goals.

Write down ALL your goals you have for the next year. Then, find someone to share them with and have them check up on you monthly to see if you are making progress. Have them hold you accountable, and give yourself rewards for completion.

TIP: Make milestones and chip away at each goal a little everyday so the overall picture doesn’t seem so overwhelming, and you get positive rewards more frequently.

Follow these simple steps, and it won’t be long before you are making TEN TIMES more than your competition.

Don’t miss the next opportunity to step out of your business for a day to set goals for your business!

 

Five Steps to Setting KPIs for Your Business

What are KPIs and why do I need them?

Key Performance Indicators (KPIs) are the scoreboard for your business.  They’ll tell you where you are winning and where you need to improve.  Imagine going to a basketball game where there was no scoreboard.  Just two teams playing basketball.  You’d be outraged and demand the score be displayed.  Yet, like many other business owners, you run your business, your livelihood, your retirement strategy, without a scoreboard.

Why are KPIs Used

As a Business Owner, you sometimes feel overwhelmed and distracted with all of the daily activities and tasks.  Yet you must make important decisions, quickly, with great consequences, and often with limited information on hand.  Without the right KPIs to guide you, you tend to focus too much on the tactical daily issues and neglect the strategic decisions that have critical impact on your success. You can’t manage or grow what you don’t measure.

What KPIs Should be Used For

KPIs will communicate and inform –  your team, suppliers, and customers, about the business situation.  They act as a diagnostic to tell you the health of your business in many different areas.  They are a source of learning – which marketing, which programs are working or not working. And they guide your decisions and help you define what action to take next.

What they should NOT be used for is controlling.  It’s tempting to try to control employees and others using KPIs.  I’m not saying don’t use them with employees, but use the right ones, and use them for continual learning and improvement, not to control how many times a day they use the restroom.

How To Implement KPI’s

Step 1: Define your strategy

  • Strategy reflects the company Vision, Mission and Values – do you have yours well-defined?
  • Set goals
  • What are your most important business objectives?
  • What “drivers” are critical to success?
  • What impacts driver results?
  • Which can align team members on strategic issues?
  • Which can identify barriers to growth?

Step 2: Audit Existing Measures

  • Assess strategic fit of your existing KPIs
  • Identify what data is available
  • Review measurement processes
  • Review Accuracy
  • Review Timeliness
  • Identify gaps

Step 3: Develop New Measures

  • Bridge the gaps identified in Step 2
  • Measures must reflect performance and progress of business
  • They are quantifiable
  • They are actionable
  • They are comparable with another number
    • Last year
    • Budget
    • Goal
    • Trend

What are the trends?  Look at your KPIs over time to see more deeply what they’re trying to tell you.  A measurement by itself with no comparison is not as revealing.

Step 4: Analyze and Report

  • Make it easy to read
  • Create a one page summary
  • Include visuals & graphs

Step 5: Continuous Improvements

  • Set priorities based on strategy
  • Ensure your goals are SMART
  • Assign accountability!
  • Track improvement
  • Set new goals!

Start today by listing the key drivers in your business.  If you’re not sure, start measuring the 5 Ways numbers:  1) Lead generation – where are your leads coming from; 2) Conversion – how many do you turn into customers; 3) Average dollar sale of each transaction; 4) Number of transactions – how many times does a customer buy; and 5) profit margin, gross and net.  Sign up for a workshop to learn more.

This article provides an overview of the five steps of setting KPIs.  Look for more details on each step coming up in the next posts.

Time – Can You Ever Get Enough?

Time – Can You Ever Get Enough?

Whether you own a business or work for someone who does, you have probably experienced the “never enough time” phenomenon.  When I worked in the high-tech world, we never had enough time to do it right, but always plenty of time to go back and fix it later. This practice was also known as using the customers for beta testing.

If we want our businesses, and ourselves to thrive, then we must focus on two things:  1) doing the right things, and 2) doing things right.  Stephen Covey, in his book “The 7 Habits of Highly Effective People” offers a powerful tool, the Urgency vs. Importance matrix to achieve both goals.

In this matrix, Quadrant 2, is a set of activities in a business, or your life, that are Not Urgent, but are Important. This quadrant is the Zone.  The Zone is that place where you set aside all the busy work of the day and focus on the things that are truly important for your long-term success.  These are activities like planning, strategy, learning and cultivating relationships.

So how do we get iTime - Urgency Importancen The Zone?  First and foremost, you make a conscious decision to get there.  It will not happen naturally, because these tasks are not urgent, they are not in your face demanding attention!

When was the last time your most important client called you up and demanded that you get to work on your cash flow forecast?  Probably never, but when was the last time a client complained that you didn’t have the right parts in stock, or that her order was a week late?  Did you take the time to tell her that earlier this year you failed to budget for parts stock, or that you failed to plan to replace that aging equipment?

This is one of the hardest things for my clients to see.  They are constantly in the “urgency” quadrant, specifically because they don’t spend enough time in the zone.  Every day I hear about how overwhelmed they are, because of all the urgent daily demands.  Getting in the Zone takes practice to become a habit. Here are some tips for how to do so.

  1. Put it on your calendar on a regular basis

Scheduling time for planning activities is probably the best and maybe the only way to ensure that they get done.  You should spend 20% of your time in Zone activities, but that doesn’t necessarily have to be weekly. It could be on a monthly or quarterly basis.  One way is to allocate 4 hours per week to planning (medium-long term, not short-term), plus 8 hours per month, plus 16 hours per quarter, perhaps in an off-site session like GrowthClub.

  1. Establish a system for accountability

Accountability will help you reinforce the need and the habit.  It can be a coach, an accountability partner, a mastermind group, a partner, a spouse or anyone that you will feel accountable to for following through.  Be sure that they know to ask you when and how you are allocating your time. Be sure that you have deliverables to them for the output of your planning, then review and discuss it with them. HINT: if you’re not willing to do this, you’re not committed to achieving the goal.

  1. Break up the work and the time into proper-sized chunks

Some people work best in 30-45 minute bursts, other prefer 2 hour chunks of time.  Pay attention to your own attention span and work style.  Then allocate the most efficient periods of time for you to get your Zone work done.  Break up the work into properly sized chunks so that you can accomplish something meaningful in each time period.  Know yourself, and when you set aside your Zone time, make sure the chunks of time will be most effective for you.

  1. Pick the right time of day for your Zone activities

In every business and for every person, there are times of day or days of the week that are better or worse than others.  If you know that Monday mornings are always crazy, don’t allocate any Zone time for Mondays.  You also know your own daily flow, so be sure to schedule your Zone time at a time of day that is best for the type of thinking you will be doing – creative out of the box brainstorming or detailed number-crunching.

If you want long-term success in your business and life, it takes this kind of intentional disciplined planning.  Success rarely happens by mistake. Be sure that you are always planning for success, not just this week, but for the next decade.

If you want to really learn how to get into the Zone, come to my TimeWise workshop Friday March 17, 2016 11:30 – 1:30.

Setting Goals is SMART Business

One of the most common denominators in all the personal growth communities and books is the importance of setting goals. You have to know where you want to go, so that the path can be revealed.  The more complex your desires, the greater the power of long-term goals, short-term goals, lifetime goals and personal goals.

The benefits of Specific, Measurable, Achievable, Results based, Time-framed (S.M.A.R.T) goals have been written about for years.  So, many agree, setting goals is a powerful process.

It is about ‘eating the elephant, one bite at a time’ and of turning vision into achievable, actionable things. It’s the common denominator of successful individuals and businesses.

Despite their obvious value, our experience with goals have shown that some are good at setting goals and sticking to them, achieving great results and others can’t keep a New Year’s resolution to stop smoking for two days in a row.

Failure to set goals can be seen as a fear of failure. That is, the blow to your integrity when you don’t reach your goals. When you make and keep commitments, such as setting and achieving goals, it reflects the amount of trust you have in yourself.  You increase your confidence in yourself to make and keep commitments to others and yourself. However, when you don’t achieve your goals you lose confidence in your ability to make and keep commitments and to trust yourself.

There are many reasons why we don’t achieve our goals. Sometimes the goals we set are unrealistic. New Year’s resolutions are typical examples. Suddenly, we expect to change the way we eat, or the way we exercise just because the calendar changes. It’s like expecting a child that’s never ridden a bike to suddenly jump on and go, or to run a marathon without months of training. These goals are based on illusion with little regard to natural growth. You must crawl before you walk.

So, how do you set and achieve goals? Stephen R. Covey says it best in his book “7 Habits of Highly Effective People”. “To begin with the end in mind means to start with a clear understanding of your destination. It means to know where you’re going so that you better understand where you are now and so that the steps you take are always in the right direction.”

An example of a S.M.A.R.T. goal might look something like the following:

Specific – WHAT

My goal is to grow my business by 25% in the next 12 months.

WHY  So that:

I can contribute to my retirement fund and retire in 5 yrs.

HOW

  1. Hire a business coach
  2. Increase business with existing customers by communicating regularly with them
  3. Develop an effective Sales Process to increase my conversion rate from 35% to 50%
  4.  Enter a new market for my existing products

Focusing on the smaller, short-term goals and achieving success will give you the confidence to set other goals. So, remember, set your goals based on the S.M.A.R.T. principle to have the best chance of achieving your goals.

Do you want to be SMART?  Join us at GrowthClub 90 day planning Sept 21, 2016 and start being SMART today.

Never Enough Time? Get in the Zone

Time – Can You Ever Get Enough?

Whether you own a business or work for someone who does, you have probably experienced the “never enough time” phenomenon.  When I worked in the high tech world, the saying was always that there was never enough time to do it right, but always plenty of time to go back and fix it later. This practice was also known as using the customers for beta testing.

If we want our businesses and ourselves to thrive, then we must take the time to do things right.  We must also be focused on doing the right things.  Stephen Covey, in his book “The 7 Habits of Highly Effective People” offers a powerful tool, the matrix based on Urgency vs. Importance to achieve both of these goals.

In this matrix, Quadrant 2, is a set of activities in a business, or your life, that are Not Urgent, but are Important – Covey time Matrixthis quadrant is the Zone.  The Zone is that place where you set aside all the busy work of the day and focus on the things that are truly important for the long-term success of your business and your life.  These are activities like planning, strategy, learning and cultivating relationships.

So how do we get in The Zone?  First and foremost, you have to make a conscious decision to go there.  It will not happen naturally, because these tasks are not urgent, they are not in your face demanding attention!  When was the last time your most important client called you up and demanded that you get to work on your budget?  Probably never, but when was the last time a client complained that you didn’t have the right parts in stock, or that you delivered her order a week late?  Did you take the time to tell them that earlier this year you failed to budget for sufficient stock, or that you failed to plan the replacement of that machine that you knew was on its last legs?  This is one of the hardest things for my clients to see, they are constantly in the “urgency” quadrant, specifically because they don’t spend enough time in the zone.  Every day I hear about how overwhelmed they are, because of all the urgent daily demands.  Getting in the Zone takes practice in order to become a habit. Here are some tips for how to do so.

  1. Put it on your calendar on a regular basis

    Scheduling time for planning activities is probably the best and maybe the only way to ensure that they get done.  You should spend 20% of your time in Zone activities, but that doesn’t necessarily have to be weekly, it could be on a monthly or quarterly basis.  One way is to allocate 4 hours per week to planning (medium-long term, not short term), an additional 8 hours per month, perhaps a couple of half-day sessions, and then an additional 16 hours per quarter, perhaps in an off-site session or two.

  2. Establish a system for accountability

    To help you reinforce the need and the habit.  This can take the form of a coach, an accountability partner, a mastermind group, a partner, a spouse or any other person that you will feel accountable to for following through.  Be sure that they know to ask you when you are allocating your time, and how you intend to spend it.  Be sure that you have deliverables to them for the output of your planning, then review and discuss it with them.

  3. Break up the work and the time into proper-sized chunks

    Some people work best in 30-45 minute bursts, other prefer 2 hour chunks of time.  Pay attention to your own attention span and work style and allocate the most efficient periods of time for you to get your work done.  Break up the work into properly sized chunks so that you can accomplish something meaningful in each time period.  Know yourself, and when you set aside your Zone time, make sure the chunks of time will be most effective for you.

  4. Pick the right time of day for your Zone activities

    In every business and for every person, there are times of day or days of the week that are better or worse than others.  If you know that Monday mornings are always crazy, don’t allocate any Zone time for Mondays.  You also know your own daily cycles, so be sure to schedule your Zone time at a time of day that is best for the type of thinking you will be doing – creative out of the box brainstorming or detailed number-crunching.

If you want your business to be a long term success, it takes this kind of intentional disciplined planning.  Success rarely happens by mistake, so be sure that you are always planning for success, not just this week, but for the next decade.

If you want to really learn how to get into the Zone, come to my TimeWise workshop Friday June 17, 2016 11:30 – 1:00.