A while back I read an article about how the staff at Tesla can’t keep up with all the visionary ideas Elon Musk and his team have (and announce). It seems a lot of what’s proclaimed isn’t close to being ready, technology wise. Much like a politician making promises and then facing reality.
This is nothing new. T here’s a fascinating historical novel by Graham Moore, “The Last Days of Night,” which is about the late 1800’s battle between Edison and Westinghouse on the light bulb and electrical transmission systems. Ideas are often ahead of technology, now, in the 1800’s, and before.
In small business, you have to be careful not to do too much too fast. This especially applies to new owners, after a business acquisition. Full of ideas and energy, it can be tough to take the time to learn the business. Most employees are still feeling out the new owner and big change can be disruptive.
I know in my business I constantly get new marketing ideas, outline them, set up tentative plans, and then realize I have to pace myself. I can’t ignore what’s worked for me over the years, I have to blend the new with the existing.
Speed is important. Urgency matters and can make a big difference between getting what you want or not getting it. A client recently lost all chances of a deal because he stalled for a month making sure everything was perfect. At the same time, you have to be prepared so when you move you’re ready, at least 80% ready (there’s a reason Pareto’s Principle is valid after all these years).
“Life is always a tightrope or a feather bed. Give me the tightrope.” Edith Wharton
It’s interesting, and a bit sad, to see town car drivers waiting and waiting and waiting outside of hotels as Uber and Lyft cars come and go with passengers. As much as the ride companies disrupted the taxi industry they did the same, or more, to town car industry.
Or at least they disrupted the drivers who still do things the same way they did five years ago. I look and see how my clients’ businesses and my business have changed over the last five years and how others haven’t changed at all. And it’s not just technology. Often it’s speed. Speed to market, speed to getting in front of customers, to getting the job done.
Your customer/client is better off if you solve their problem sooner versus later. From advice, to product delivery, to having a car when and where you need it, with you being in control of the ride
For the last five years or so my CEO Leaders Group has met at Pearl restaurant in Bellevue or its (former) sister restaurant Koral. In September I was frustrated when I received a call saying my meeting the next day would have to be moved from the private room to the general restaurant area because someone else wanted the room, and was willing to pay a guaranteed minimum fee.
We worked it out, we didn’t have to move, but it was still on my mind when I reserved dates for January and March. So, I asked if this could happen again.
The manager, Kristi, who happened to be on maternity leave in September, replied we would never be bumped or threatened with it again as we’ve been a loyal customer for a long time. She said it was her replacement who was going with a strict interpretation of the rules.
“Rules are meant to be interpreted” was a topic when I facilitated the annual conference for NW Student Exchange in October (as there are obviously a lot of rules with foreign exchanges). Great customer service means you grant some leeway to some
Recently I once again taught my very popular class, “Dynamically Growing a Consulting Business,” at the local SBA/SCORE office. Every class is different, which makes it fun. Whether there are 10 or 25 people we go in whatever directions the students choose to go.
Sometimes we do a few “hot seats,” with students up front role playing, and sometimes we’ll do 8-10 of them. One item I distinctly remember from the last class is my saying at least a few times:
“The only thing worse than no client is a bad client.”
It’s a variation of what I say to business buyers and sellers, “The only thing worse than no deal is a bad deal.” It’s something we all need to keep in mind, no matter what business we’re in.
Not all, but most people reading this offer a service or have a B2B business (very few retail subscribers). This means most of you are in a relationship oriented business, not a big-box, “Go to aisle 27, right side, about 2/3 of the way down the aisle.”
Recently I and an associate met two prospective clients, both of which we felt will be enjoyable to work with because they came across as honest, outgoing, and reasonable. There are times when prospective clients/customers decide not to work with us (from Counselor Selling I learned the four reasons why are no need, no hurry, no money, or no trust, with the last one often disguised by saying one of the other three).
The point I made in my class was we need to be just as fussy with whom we take on as a client/customer. The vast majority of people are good to work with, just watch out for the few difficult ones.
“Life is either a great adventure or nothing at all.” Helen Keller
What interesting times we live in, as people in every generation have said. What spurs this thought is the New York Times coming out in a favor of a Trump administration program (after going on a long vendetta against anything Trump, which they still do).
The Times wrote in favor of the administration’s plan to increase apprenticeship programs in the trades. It goes to show no matter how much you can’t stand someone it doesn’t mean everything they do or say doesn’t have value.
I have clients who worry they won’t be able to grow if they can’t find qualified people, who can pass a drug and background check. Business buyers have passed on deals because the seller informed them about how tough it was to find more (good) workers. This is in electrical, HVAC, roofing, trucking, and other industries.
Add qualified labor to the crisis list a notch below opioids, homelessness, and poverty and realize if apprentice programs are successful it will reduce the previously mentioned problems. While having a different focus, it’s one reason my Rotary club and I have sponsored a dozen overseas projects putting technology in schools and sewing centers around the island of Antigua. The better educated we are the better the economy will be, whether it’s tech, the trades, or anything else.
In the recent news is the story of how Pakistan’s Prime Minister Nawaz Sharif was removed from office based on corruption charges and not being “honest.” I’m guessing there were some political motivations behind this.
What was reported by only some outlets was one of the key pieces of “evidence.” Some London real estate was owned by his children and his daughter produced a document showing she was not an owner but only a trustee of some offshore accounts. The problem is, while dated in 2006, the font they used wasn’t commercially available until 2007.
This sounds like something out of the young-person mystery. The teenage detective foils the bad guys by showing they used a non-existent font on their old documents (while all the adults debated and argued).
At the annual conference for the Society for the Advancement of Consulting I once again heard about how speed matters, i.e. have urgency. Also, how in this fast-moving world 6-12 months is a long time (meaning it’s ridiculous to have a five-year plan and projections), and why it benefits the client to get things done sooner versus later.
Well, let’s tell that to the government. A client had a visit from a government agency 2.5 year ago and jut two weeks ago got a letter saying how they needed to change a few things. Two and one-half years to get out a letter. If this stuff was so important wouldn’t you think they’d want it corrected then not now?
In my upcoming book, Growth By Acquisition Makes Dollars & Sense, I end each chapter with a short story about a client who grew their company by buying another one (or more than one). Here’s one of those stories.
John Hoyt is the founder and CEO of Picture Source NW, in Seattle www.picture-source.com, one of the nation’s leading providers of art for residential and commercial customers. Most recently John acquired Somerset Studios in North Carolina, one of a handful of acquisitions he has made.
There are three things John likes best about acquisitions:
The adventure (of the process). It’s thrilling to him to find a company that adds value to Picture Source and put a deal together.
The increased energy level. Everybody gets “jazzed” as it comes together and during the transition. He’s found it not only brings together his team but also the employees of the other company.
The culture improvement. He’s found this brings everybody together and the results spills over to the other aspects of the business.
When asked why he’s made acquisitions his answer sounded like the perfect segue to Chapter Two as he rattled off five reasons.
To open up a new distribution channel.
Location, i.e. geographic expansion, which also can lower overall costs (now having an East Coast location saves Picture Source a lot of money on shipping).
Talent, especially on the creative side.
New account base, customers he couldn’t get without the products and channels.
New capabilities, in his case meaning more products. For example, with his acquisition of Somerset he acquired an operation producing original artwork.
John’s tip for others is to hire outside advisors and use your team to avoid problems.
Motivations for Owning a Business
Guest column from Gregory Kovsky, IBA Business Brokers
An introductory conversation between adults locally will often include an inquiry about each person’s occupation. Common answers include “I work for Boeing, Microsoft, Amazon, Costco, Starbucks, the University of Washington”, or any of the numerous other entities offering employment in the Seattle metropolitan area. A rare answer to receive is “I own XYZ business”. Think about it a minute, how many people do you know that own a business and create employment rather than working for someone else. My guess is that the number is significantly less than the number of people you know that are employed. Now think about the people you know that own a business. Do you admire them? The common answer is “YES”. Why is that true? One reason is that entrepreneurs are traditionally confident & optimistic. Two personality attributes that attract friends & followers.
Confidence & optimism are fundamental characteristics of successful business owners. However, they are also characteristics found in quarterbacks, doctors, attorneys, military officers, and corporate executives. The question is what motivates an individual with these attributes to become an entrepreneur. In my 24 years as a business broker, I have identified the following four primary motivations for owning a business:
Freedom is one of the great human motivators in history. Freedom to openly practice a religion of choice motivated people to leave England and lay the foundation blocks for the United States of America. Freedom to execute their vision for selling high demand consumer products at a discounted price motivated Jeff Brotman & Jim Sinegal to create Costco, one of the greatest entrepreneurial success stories in retail history. Entrepreneurship at its core is about the freedom to execute a business plan to an individual’s or group’s vision. This desire has motivated many entrepreneurs to risk time, energy, and resources to make a dream a reality.
The desire to control one’s future and work environment is a strong motivating force. The most common manifestation of this desire is to seek employment in a preferred location, industry, or with a specific company. A less common action is to take control of one’s life path by creating or buying a business. Examples of business acquisitions motivated by control witnessed at IBA have included corporate executives buying businesses before they are relocated or replaced with less expensive alternatives; gay & lesbian individuals buying businesses to create a desired corporate culture; and parents buying businesses to create leadership & income opportunities for children.
The desire to build a better life is a strong motivating force for many people. A common component in constructing a better life is increased personal income. The reality of employment in a capitalist economic system is that for a job to be offered an employer needs to make money off the production of the position. Entrepreneurship offers a road to income above “market value” for their labor contribution for individuals with the knowledge, experience, and skill to compete successfully in business. It is common for parties purchasing privately held companies from IBA to make a 20 – 40% return on their investment after “fair market” compensation for their labor contribution to the business. This salary plus high investment return dividend compensation is a strong motivation for buying a business from IBA. In addition to this short-term return, unlike a job, a business can be sold when an entrepreneur retires. It is common for IBA clients to receive 6, 7, & 8 figure sale prices for their privately held companies and family owned businesses, a great nest egg for estate planning or retirement.
Lack of Alternatives
Many individuals immigrate to America annually from around the globe. These individuals come to United States with a spectrum of knowledge, experience, and skills. Unfortunately, language and a lack of uniformity in licensing for professionals can limit employment opportunities for new immigrants and their families. However, the good news for individuals with appropriate confidence, work ethic, capital, and skill is the sky is the limit in terms of what is possible as an entrepreneur. Favorite success stories at IBA for individuals who became entrepreneurs because they lacked an alternative path to financial security and professional fulfillment include a Moroccan electrical engineer who created a component level repair business for computers, a Russian entrepreneur who went from selling cigarettes at the end of communism in Moscow to operating a chain of florist shops known for their artistic quality, and a Korean professionally trained dog groomer who runs one of Seattle’s best canine beauty parlors. Nothing is more rewarding as a business broker than seeing people live the “American Dream” and take advantage of the unique ladder of opportunity that exists in our country for everyone. It should be noted that Wan Kim, my friend, who bought the dog grooming business with financial support from family in the 1990’s, used that business to send both of his daughters through medical school. A multiple generational, uniquely American success story that gives me great pride.
Entrepreneurship is the path not taken by many people during their working career. However, for those with the proper motivation, skill set, knowledge, and experience it is a path that can result in a life of opportunity, freedom, and financial reward.
Gregory Kovsky of IBA (www.ibainc.com), the Pacific Northwest’s premier business brokerage firm since 1975, is available as an information resource to the media, business brokerage, and mergers & acquisitions community on subjects relevant to the purchase & sale of privately held companies and family owned businesses. IBA is recognized as one of the best business brokerage firms in the nation based on its long track record of successfully negotiating “win-win” business sale transactions in environments of full disclosure employing “best practices”. Mr. Kovsky can be contacted directly at (425) 454-3052 or .
A few times a year I teach a class at the local SBA office (titled Dynamically Growing a Consulting Business). At the last class we had quite a few no-shows so I asked the admin person about it and she told me the no-shows were people who didn’t pay when they registered.
So I suggested they require payment with registration. It’s the same with everything. The less commitment, the greater the chance people will change their mind. At my annual (free) Getting the Deal Done Breakfast Conference we order breakfasts based on 20% of the people not showing up.
It’s a good lesson for every business. Get as much commitment as you can from customers and get it as early as possible.