Labor Day, our second “New Year’s” as schools are back in session, vacation season is over, summer is winding down, football season is starting, and people feel renewed.

I learned very early in my current business people will put off big decisions (buy a company, sell a company, implement major initiatives, etc.) during the summer and the holiday season. There’s too much other stuff going on, whether it’s your stuff or your employees stuff (meaning there’s more time off during the summer than the rest of the year).

Labor Day was originally to honor the working class. While unions still play up this fact, for most people it’s the last hurrah of summer. In business it can be, “Now we can get some things done!”

So what do you want to get done between now and the end of the year? In my world I see the following:

Business owners start seriously thinking about their next great adventure in life. (Hint, time to read my book, If They Can Sell Pet Rocks Why Can’t You Sell Your Business (For What You Want)?) An owner who wants to sell in 2017 should take the next six months and start doing all the things recommended in my book (versus just “putting it on the market” as-is).

Business buyers typically get active. Most erroneously believe they can start in September and close by December 31 but that’s okay. Optimism is always good. Being our second renewal of the year it’s when we take a little more time to plan and think through what we want. It’s time to take control, create independence, and create self-wealth versus shareholder wealth. Or, to buy another company to leapfrog the competition. (Another hint, read my book Buying a Business That Makes You Rich.)

Owners looking to grow will take the necessary steps. Judging by the number of people in my class on growing a consulting business 10 days ago there will be more people taking control of their life in this manner.

All in all, it’s a time of action.

“The future depends entirely on what each of us does every day. After all, a movement is only people moving.” Gloria Steinem

Selling Phone Services by Email

At least two to three times a week I get an email from some company telling me how their telephone outreach services can help me set appointments, generate clients, etc. I think you can figure out what’s wrong with this picture.

They are writing to tell me how great they are on the phone but they can’t pick up the phone and call me! If their callers are so dynamic they should be able to convince me, using their voices, right?

Another way to say this is, your actions speak louder than your (written) words.

I thought it would be interesting to look at the above (actions versus words) from the perspective of my clients.

Businesses need to generate revenues by finding new customers and, most importantly, keeping existing customers happy. I recently did some due diligence calls to customers of a company selling. All of the “reference check” customers described firm as a “partner.” Yet I see too many companies (the people in those companies) that only look at the next sale. They often aren’t true problem solvers for their customers.

When I’m coaching or mentoring owners and consultants we always get into the subject of providing value. Sometimes it’s ideas. Other times it’s actually giving advice (especially if you call yourself a trusted advisor). Not just discussing options, but advising the client. That’s where true value is derived.

[As I am writing this I get a call from Totally Free Conference Calls. Twenty minutes prior I sent them an email saying I was getting call reports from calls that aren’t mine – somebody was mistakenly using my code. Not a big deal but I don’t want to have having a call the same time I do. Immediately they took action, called me, and fixed the problem. That’s customer service.]

Business sellers often wake up one day and decide it’s time to sell. Yet most businesses aren’t ready for sale. I recently was referred to an owner and based on our phone call and the firm’s website I know of three or four things this company (the owner) needs to do to make the company more salable. It’s why I came up with my ACTIONÔ to sell a business (as fully described in my book, If They Can Sell Pet Rocks Why Can’t You Sell Your Business (For What You Want)?)

An ACTION plan to sell a business is:

  • Arrange all the affairs of the company
  • Coach and counsel the company. Its people, process and systems
  • Transmit and teach all the good “things” about your firm, and those “things” are:
  • Intricacies that make your company special
  • Operations and management systems in place that will make a transition smooth
  • Numbers, all the financials in understandable form, straightforward with no “tricks”

Finally, business buyers too often don’t put their money where their mouth is. It’s why up to 90% of supposed buyers never buy. It’s great to talk about it, but when it comes time to do something…. Kicking tires is fun, when shopping for a new car. Of course this is why I follow a proven plan with my buyer clients. So they can stop talking and become a business owner.


No matter what your business or your objective, it pays to be prepared and to put your money where your mouth is. In other words, don’t send an email to solicit telephoning services.

Streamline or Clog the Growth Path

The European Union has a myriad of rules and regulations. One of the most “interesting” (substitute your term for interesting after reading the rule) is a requirement bananas sold in stores be free from “abnormal curvature.”

The point of this memo is not to discuss the EU’s bureaucracy, it’s to discuss streamlining the path to growth, which the EU is struggling with right now (so maybe there’s a connection).

  • When I coach business owners it’s all about growing revenues, making more profit, and doing so while working less.
  • Helping business owners work through the strategies in my book If They Can Sell Pet Rocks Why Can’t You Sell Your Business (For What You Want)? always gets us focused on growth. It’s because one of my top three tenets regarding preparing a business for sale is to show growth.
  • My work mentoring consultants always focuses on generating clients, i.e. making a sale to create revenue.

A streamlined path is always easier to traverse than one filled with obstacles, especially self-imposed obstacles. So ask yourself, whether you have 100 or more employees or are on your own, are you making it as easy as possible to generate more revenue? Or are you getting in your own way like the:

  • CPA firm wanting to sell but undercharging their clients, making it difficult for an acquirer to keep those clients (when they charge market rates).
  • Financial advisory firm charging twice the going rate, which scared off buyers for his firm as they (ethically) wouldn’t charge that much.
  • The business owner who was his main bottleneck because he refused to train anybody to do certain tasks. “I can do it in 20 minutes, it will take over an hour to teach somebody, so I’ll just do it.” Every day he did this, for years.

We get enough rules, guidelines, and regulations from government, large customers, etc. There’s no need to make your own.

“Beware of all enterprises that require new clothes.” Ralph Waldo Emerson


Tear Down or Build Up

Almost daily we take our dogs for a walk. Meandering through the woods and a mixture of neighborhoods, depending on the route we take, we see a mixture of old and new houses. Kirkland has many small, older homes now being surrounded by newer, larger homes.

A little game my wife and I play is, “Which will be the next teardown?” In a way home teardowns are a lot like the business bell curve.

  1. An innovator type will be the first person on the block to buy an old house, tear it down, and build a new one. He takes the risk others will do the same so he’s not stuck living amongst houses that bring down the value of his house. The same is true for people who take the risk of starting a business, especially one with a new product or service. Of course, the innovator will get his teardown for a reasonable, if not low, price while businessperson pays for the learning curve (developing a market, product refinement, etc.).
  2. Other homeowners in the area and buyers will see this and soon more and more older homes on the block will sell. The price for the older homes will increase, because the next new house will not be the only one. In business, others will see the new market and, depending on the severity of the barriers to entry, decide to start a similar business. Less perceived risk, product acceptance, etc.
  3. Finally, most if not all of the homes on the block will be newer homes. The late buyer will find she has to pay more but her value is there because of all the other new houses. The late seller will get more because there’s more demand. In this case, everybody wins to some degree. Not necessarily the same in business. If the barriers to entry are too low more and more people will enter the niche. One person, and then more, will franchise it and soon it’s a commodity.

When it comes to buying and selling a business most buyers and sellers will want to be in the middle example, with some barriers to entry and definitely with a competitive advantage they can leverage. This is what leads a solid market share and sustainable profits.

“These are my values. And if you don’t like them, I have others.” Grouch Marx


Who’s Your Judge and Jury?

In his book, “Originals,” (Penguin Random House, 2016) Adam Grant’s Chapter Two, Blind Inventors and One-Eyed Investors, discusses how misguided certain opinions can be. Two of his examples are the invention of the Segway and the creation of Seinfeld.

Steve Jobs, Jeff Bezos, and other innovators absolutely, positively loved the Segway. They thought it would revolutionize the world the way computers and (and other recent inventions) did. Almost everybody at NBC panned Seinfeld and it took one person’s lobbying to, barely, get past it’s pilot episode.

We know how the above two things ended. The Segway was and is a novelty, another way to say a flop. Seinfeld was one of the most successful television shows ever and I’ll bet you can find an episode on your TV now and almost anytime day and night.

Grant’s point (simplified here) is certain people should not be the deciders. Jobs, Bezos, and the others saw innovation for innovations sake but didn’t address the market need or want. The management people at NBC saw something different than the typical sitcom and couldn’t understand the concept.

One comedian interviewed in the book said he didn’t care what 20 people in a test audience or what some management person thought. They aren’t his indicator of success. His indicator of success is if he can make other comedians laugh  because then he knows he has a winner.

My point here is, if you have a new idea for your business be careful with certain feedback.

  • Management will probably be cool to the idea, as it’s different.
  • Customers set in their ways will be hesitant to try something new.
  • Your salespeople may find it outside their comfort zone, and want to sell the same old product (solution).

Find your comedian (user) to test your new jokes (product or service) and be careful when people are too excited or too down on something.

“If voting changed anything, they’d make it illegal.” Emma Goodman


It’s Always the People; Whether Operating, Buying, or Selling a Business

On Tuesday, August 16, 2016 the Wall Street Journal had a major article titled, “The Company Town That Chocolate Built.” It’s all about Hershey, PA at 14,500 population town where the Hershey companies employ about 12,500 people (many don’t live in Hershey).
Mondelez (formally Kraft Foods) made an unsolicited offer for Hershey and the locals are upset. They fear big changes, the loss of jobs, plants closing, etc. Especially because when Mondelez bought Cadbury they promised not to close a local (British) factory but then closed it after the acquisition.
On August 15 the WSJ had another article in which one of the subjects said he left his job after his boss downplayed his angst over firing people by saying, “It’s no big deal.” Big companies have a reputation for not caring about people but actually it’s the employees of big companies who care more about their career who make lousy decisions and say stupid things, like in this paragraph.
So now we get to small businesses. In the last week I’ve talked with three people about how business sellers almost always want to sell to someone who will take care of their people. The employees first and then the customers. Almost everybody in my industry has a story or two about how a business seller sold to someone for less money because of the relationship. It’s why I stress the relationship to both buyers and sellers.
Most owners value their people. All buyers value their people. Good employers want to enable their people and help them grow.
No matter what type of business, the people are the primary asset. Even robotic and computer controlled machines need a person to program them. As one business buyer said to his seller, “You may think I’m buying your company but I’m really buying your people.”
“I would never buy from or sell to someone I don’t like.” [Former client, business buyer and seller] Jim Bernard

Surprise! Not Always Good

During our annual summer visit to Bozeman, Montana we had just hiked a canyon, and were relaxing with a beer and dinner on a brewery’s patio. Across the street was the fairgrounds, where it was the “Bozeman Stampede” Rodeo.
We weren’t there long when a helicopter flew overhead hauling a huge American flag. As it finished its circle of the fairgrounds all of a sudden there were half a dozen loud, explosions. Fireworks with nothing decorative, just noise.
Everybody on the patio jumped and our dogs, and the other dogs, freaked out. They were scared and needed to go to the car for five minutes to settle down from the shock of the surprise noise.
Most people don’t like surprises either, unless it’s something like a surprise party. Just like most people don’t like change. They’ll keep doing a job they hate, keep an unproductive or disruptive employee too long, etc.
Nobody likes the change of business ownership, especially when it’s a complete surprise. It’s one of the touchy subjects in any transaction. What’s the buyer like? Will things change (for the worse)? Will my pay go down?
The issue always is, when does the seller tell the employees? I’ve seen them do it too early, and the employees react like my dogs – freak out (and look for another job). I’ve seen it done after the deal closed and the employees get upset with the seller because he didn’t trust them to tell them prior to closing (and now the buyer has to deal with the culture change from this).
A few hints, a little forewarning, and bringing key people into the loop early go a long way to helping keep people happy, maintaining the culture, and reducing the shock of a surprise.
“To learn who rules over you, simply find out who you are not allowed to criticize.” Voltaire

Don’t Forget These Things

When visiting my mother-in-law, we stayed at the Intercontinental Hotel. As we went to put things in the safe it wouldn’t open. It was locked. So engineering came, opened it, found some things, asked us if the things were ours, they weren’t, and took them away.
Those things were a designer purse and a passport holder, with a passport and other items in it.
I’ve forgotten things. A book on a plane, my phone on the seat of a cab, etc. However, I knew within minutes what I did. But who forgets this stuff?
There’s a very small chance, maybe 1%, a personal catastrophe hit and the lady vacated the room quickly, forgetting about the safe. More likely it’s someone too busy (this is a popular business hotel), doing too much in too short a time, and she simply forgot she had things in the safe.
Things like this happen in business too, when we get so busy we forget important things. Like customer relations, employee satisfaction, supplier loyalty, etc. Here’s what I mean.
  • Many years ago my good client Keith Jackson with Industrial Revolution gave me such a great line I wrote it down and use all the time. When discussing marketing he said to me, “It’s amazing what happens when you actually pick up the phone and call your customers.” His business seller was coasting and just taking orders. Taking orders until the customers felt neglected and left, right?
  • We all know people like the person in this example (I won’t name the company out of respect). A top salesperson left because he felt the owner didn’t value his work. The owner did value him, his efforts, and results, he just didn’t show it. So the employee went bye-bye.
  • A past client got stung twice by the same lack of concentration with his suppliers. He lost his top supplier, a firm upon which he was overly dependent, as it was over 66% of his business. He nearly went under (I worked with him after his banker brought me in), got a new product line, built up the business, and voila, the same thing happened. He got so busy he forgot his history and had another supplier dependency. The supplier left, his business went off the cliff, and it was back to the beginning.
Nothing new here; take care of (your) people and they will take care of you. Forget about them and soon you’ll be without them.
“Memory is the way we keep telling ourselves our stories, and telling other people a somewhat different version of our stories.” Alice Munro

“Surprise” Economy

Here’s an excerpt from the article:
Citi’s Surprise Index measures economic data relative to expectations. If reports are surprising to the upside, that means indicators such as employment, housing and inflation, are coming in higher than expected and the index is rising. A declining index suggests more data points are falling short.
Citi’s index had been in negative territory for much of the past 18 months. Perhaps not coincidentally, U.S. stocks were stuck in a fairly narrow trading range for much of that time.
Now compare this to all the economic doomsayers (definitely not in Seattle or the Bay Area). This index is at its highest point in 1.5 years, which surprises me because we’re in an election year, a very contentious election year.
For those of us in Seattle the Surprise Index results are not a surprise. My clients and other business owners have had a hard time finding good people. Heck, even in the small town where our cabin is there are “help wanted” signs everywhere and a friend told me “it’s hard to find good employees around here.”
So how does that tie into your business or mine? In mine optimism means more people willing to take the leap of faith to buy a company or to sell their company. Yes, buyers worry if they think they are buying at a peak, but an index like this should alleviate some of their fears (nothing will alleviate every fear a buyer has, which is the way it should be, healthy skepticism).
Sellers always wonder if they’re selling too soon, but should realize if the future economy is strong there is less chance their buyer will have problems. My advice to them is do what it takes to get your business ready for sale so you don’t miss the rising tide (see my book, If They Can Sell Pet Rocks Why Can’t You Sell Your Business (For What You Want)?).
“There are very few monsters who warrant the fear we have of them.” Andre Gide

How Not to Run a Company

Want to run your company the wrong way? Do nothing more than emulate the major political parties. They sure seem to have a lock on ineptness, goofiness, and disputes. Here are five examples comparing political parties to businesses.
Strategy – or should I say the lack of strategy – must be discussed. Both parties seem to go the direction of the most current wind (this is not new, it’s been going on for years). They can never figure out if the goal is to appeal to their base, usually a minority within each party that is loud and pushy, or appeal to the swing voters. So they do a little bit of both often leaving the election to the quality of the advertisements.
Continually changing direction will put you out of business.  Of course, if your strategy keeps changing you really don’t have a competitive advantage to exploit, because it’s always changing. When you confuse your customers they will do nothing, or go somewhere else.
Advice: have a strategy that exploits your competitive advantage and continually implement it. When it comes time to exit you’ll be glad you did because growth is one of the key elements a buyer wants in a business.
Culture – the tail sure wags the dog in national politics, doesn’t it? Candidates push the party platforms objectives, not that too many people besides the extreme loyalists pay too much attention to it. But candidates push each other. Look at the Democrats this year. Clinton said no to free college tuition until Sanders made his run. Then she switched saying there should be free public university tuition.
Try this in your business someday. Every time an employee has an idea change direction. Then see what happens when two employees have different ideas on the same subject. You can’t do both and if you have a habit of trying to appease everybody just watch the culture disintegrate when you pick one or the other.
Advice: create a culture of free flowing ideas but make sure there are no expectations.
Undermining and deception– political candidates have a way of being prime examples for “pay attention to what I say not what I do.” This is another trait that’s been going on for years. How many times do politicians promise everything to everybody, not deliver, and most voters (those who’ve been around awhile) know enough to realize it’s just blabber?
In business it’s the owner who has separate rules for herself, her family members, and favorite employees. It’s one of the reasons delegating can be tricky. If not careful people will think it’s favoritism not delegation.
Where this really is an issue is with the financial statements. Too many owners play games with their financial statements, all as part of the never-ending quest to reduce taxes. Some of their tactics are illegal, for example,the blending the personal and business checkbooks.  Some are just stupid. So many times I’ve heard owners say they bought a (not really needed) new truck or new machine because “I needed the write-off to reduce my taxes.” Realize if it’s not needed, even if the government pays 33% of it, you are still out 100% of the cash.
Advice: set a good example, be consistent, and have your financial statements be an accurate representation of the business and its potential. Buyers like this and banks love it.
Short cycles – politics run on extremely short cycles, every two to four years there is the potential for major change. This is almost as bad as Wall Street being enamored with quarterly performance, much less the challenge of short-term bonuses versus long-term results.
Most small businesses don’t have these issues but they do have an issue that sometimes presents a challenge when selling the business. This issue is the lease. The bank and the buyer will want a lease, with options, at least as long as the term of the loan. Disaster strikes if the business has a, very expensive, move in the middle of the payoff period. Yet most business owners don’t think of this as they do their day-to-day tasks.
Advice: Plan for the long term and run the business for the long term. It will pay off as you’ll have a growth plan, up-to-date equipment, happy employees, and more.
Dependencies – political parties have huge and ever-changing dependencies and it’s called the candidate. In a presidential year it’s the presidential candidate. And a lot of what happens is based on the candidate’s personal philosophy and preferences.
Look at the Republican convention. It surprised me when the Trump people had a gay speaker, used the term LGBTQ, and mentioned eliminating the gender pay gap. Not exactly in line with the party platform, is it?
You know where this is going when it comes to a business. Get rid of your dependencies, especially if one of them is the owner. Reduce customer concentration, get rid of employee bottlenecks, and owners, please realize less is more when it comes to your involvement in operations.
Advice: it’s pretty obvious, reduce any dependencies your business has, especially if it’s you the owner, and the sooner the better.