Author: JohnM

I was a cafeteria monitor for at least my senior year in high school (maybe my junior year also). It wasn’t a bad job. We made sure kids didn’t act like kids, food wasn’t thrown, the lines moved along, and the finished trays didn’t back up on the conveyor back to the kitchen. The benefit, monitors got as much food as we wanted, and we had a great team of cooks who served 2,700 kids a day (it was a closed campus) and growing boys need a lot of food.

I hadn’t thought about this in way-too-many years until I saw a headline in the Wall Street Journal on July 26 that said, “Supply Chains Pinch School Menus.” Food suppliers to schools are having a tough time getting food and other supplies, they don’t have enough workers, and transportation is an issue.

Just like almost every other business these days. It’s tough operating a business when you don’t know when you’ll get materials, will you have enough employees, will your customers want what you have if they can’t get other things needed to make their product or do their business. The article mentioned one company “gambling” on stockpiling fruit without knowing what the schools would be ordering.

It also changes due diligence for business buyers. They must now look at the supply chain, the suppliers, how they get the product, etc. For a while the top worry was easily employee availability and if supply chain worries haven’t overtaken that worry, they’re a close second. Another example in the article was about suppliers backing out on their customers. Tip to owners (especially soon-to-be sellers), have multiple suppliers and always be in contact with them.

For buyers, it’s be cautious and investigate the heck out of the supply chain.

“We can understand things better. We can never understand things fully.” (Physicist) David Deutsch

We recently took a long-weekend trip to Denver to see a client and relax for a few days. I noticed something I often notice in airports and it’s most people overpack. It’s summer, there aren’t too many places to go where it’s not warm (meaning no parka to pack), and I can’t see how people need more than a carryon size suitcase plus a backpack for their computer, headphones, book, etc. Face it, most people go places where there are stores and wash machines.

Of course, most of us overpack in life and business also. Too much stuff around our houses, too many clothes in the closet, too large a list of things-to-do around the house, etc. And in business, it’s just as bad or worse. 

Business owners and sellers overpack as follows:

• They make things too complicated, often for employees and for customers (ordering and reaching someone for service should be easy not hard).
• They don’t invest in up-to-date technology or processes. Business buyers like it when there’s low hanging fruit, meaning easy upgrades that save time and money and I can’t remember the last time a sold business had all current hardware and software.
• Micromanaging, which slows down productivity and employee growth.
• Making the business, or a critical part of it, dependent on the owner. This is a big one and, as I wrote a few months ago, an owner told me a large firm “beat me up on price” because they said the business was too dependent on him.:

Business buyers also overpack:

• Dreaming there’s a perfect business out there. Wake up, there are no perfect businesses or perfect deals.
• Getting analysis-paralysis. As I say in the preface to Buying A Business That Makes You Rich, buying a business requires a leap of faith and you want to make it off a chair not the roof. But you’re still making a leap, so make a decision.
• Not realizing it is work. It takes effort to locate, analyze, and structure a deal on a mature, profitable (and fairly priced) business. It’s pretty darn easy to buy a crappy business or grossly overpay.

And, in my market of sub $10 million deals, realize relationships rule. Nobody will buy from or sell to someone they don’t like (which also means they don’t trust them). Unpack the ego, get rid of excess baggage, use your team, and get the deal done.

“Remembering that you are going to die is the best way I know to avoid the trap of thinking you have something to lose.” Steve Jobs

“You can lead a man to congress, but you can’t make him think.” Milton Berle

There’s an old story, about how if you put a frog in boiling water, it will hop out but if you put it in cool water, slowly raise the temperature it will stay in the water and eventually die. I don’t know if it’s true or not, but I get the concept because when my electric shaver blades get dull, I don’t notice it until they’re really dull. The change from day-to-day, week-to-week is so small it’s not noticeable.

The same thing in business, old practices (habits) are hard to change. Take the company that manually entered about 400 transactions into an online portal for payment. The new owner found a $50 a month software package that did all of them at once, using information already in the system.

Or what about the companies still writing and mailing checks when most vendors make it easy to pay online (and many take credit cards). One client manages credit card payments to get an extra 45 days of working capital, plus the points or cash-back.

It’s why I say new owners of a business are often “A Breath of Fresh Air” and it’s not just culture. They often are more in-tune with technology and employees love it when they have tools to be more productive. Heck, many years ago a client doubled his (newly owned) business in two years and he said the main driver was an online ordering system to book jobs versus phone calls (and phone tag).

A good idea is to look around your business and notice all the things you’re doing the same way you’ve done them “forever.” I’ll bet there are some tools out there to make mundane processes less burdensome. 

“One of the symptoms of an approaching nervous breakdown is the belief that one’s work is terribly important.” (Philosopher) Bertrand Russell