This is a tale of two small businesses (apologies to Charles Dickens for plagiarizing the title). Let’s take a look at them.
Company A has a management team, a board, the CEO is in a peer-to-peer support group and utilizes a coach.
Company B has an owner who is on his own. He makes all the important decisions, is great with the employees and customers, but doesn’t really have a handle on the business. We often call this, “management by checkbook,” there’s money in the bank account so things must be going well.
Take a guess at which company is better at the following and which gets caught by surprise by looking at the following three areas.
- Monitoring trends over the immediate past and present including backlog of work, requests for bids, etc.
- Margin control, meaning in inflationary times are margins being held or are they slipping?
- Is there a marketing plan and is it implemented?
Pretty easy, isn’t it? Of course, company A is on top of things. And yet there are a lot of businesses like company B and when things are going well all is good but when there’s any disruption the reaction is, “What the heck happened?”
And owners like company B’s owner don’t understand their business’ value is diminished when they don’t have a management team, don’t plan, and don’t consistently market. Buyers see these things and some runaway and others think it’s opportunity at a lower price.
Which would you like to emulate?
“Does one have to go through catastrophe to arrive at vision?” (Artist) Niki de Saint Phalle
“In a fight between you and the world, back the world.” Franz Kafka