Kerri, Author at This Way Out Group - Page 10 of 25

Stagnant 95% Statistic

It’s devastating. Ninety-five percent of all businesses never achieve their goals for the business and beyond, not to mention the long-term financial expectations for their families. This 95% statistic is widely accepted as an unchangeable fact and “the risk of doing business.

I can’t understand why it is still the accepted norm. Just like you confront and address every other risk you face in business, why not illuminate this gap, address it and fix it. I want to help you minimize the risk and overcome this statistical barrier to your success, to fulfill your dreams.

The core causes of this problem have been around since you launched your business. The solutions aren’t easy but they are so inexpensive that you can afford to implement every one and still stay within your budget. The key is, that we must reveals the flaws of businesses today and owners’ biggest self-imposed barriers.

The solution I present is a system that builds a strong foundation for your business, whether:

  •  You are just starting out, or you’ve been in business a while
  •  You have a team or no team
  •  You have revenues less than $100K or more than $10M
  •  You are on a fast-track to be acquired or want to cash out to pursue your reinvention

When you systematize your entire enterprise for long-term results, it will transform your business and your life. You will gain time, control, freedom and flexibility all while the business prospers, grows and breaks through to achieve new heights of success you didn’t dare dream of – until now. Everything you do to accelerate growth and maximize value makes the business more buyer ready and buyer attractive.

If you are in business delivering product, content or services, then you have a few options to grow your business exponentially. Simplistically, your choices are to:

  •  increase the number of clients
  •  increase the volume you sell/client
  •  increase prices
  •  decrease costs
  •  or a combination of these four

When you take action to build a sale-able business, you join the 5% who successfully complete the transaction and transition to their reinvention.

Your Window of Opportunity Starts Now

Window of Opportunity quote from Rapunzel

Without a doubt, when you lack the knowledge to build
a strong foundation for your business,
you commit yourself to more struggles, wasting time
and making everything harder.

This is your opportunity. Before it’s too late for your business. Before you murder your business.

If you take action to prepare your business now, over time, you will join the 5% of all businesses that succeed.

Heed the mistakes made by more than 90% of all entrepreneurs that prevent them from achieving their goals, fulfilling their dreams, profiting from their business and designing an ideal exit strategy on their terms.

By doing this kind of strategic thinking with clients, we help many struggling entrepreneurs and owners to develop a business foundation that enables them to  make their business a success and achieve their goals in the business and beyond.

Everything we offer on this website is here to help you. The website, my book, HARVEST Your Wealth, the whitepapers, are all designed to propel every owner/entrepreneur to success. What we offer is an antidote for the 95% failure rate.

Just like the medicines your doctor prescribes, solutions and strategies offered here only work if you take them (take action).

The 5 Ps of Long-term Prosperity

[Aaron Young, CEO Laughlin Associates shared this article this week.
I could not Not share it with you.]

It takes a great deal of focus and determination to keep a business running strong and it starts with having a clear understanding of the 5 P’s,  purpose, preparation, protection, passion, and profits which all play an equal part in your business success.  Each category comprises a specific portion of the business which characterizes the steps needed to create long term growth and prosperity.

Prosperity

PURPOSE

“People with clear, written goals, accomplish far more in a shorter period of time than people without them could ever imagine.”– Brian Tracy, Author

Defining the purpose of your business plays a critical role in the success of your company. When you started your company you had a reason, you had a vision, and you had a mission. Your business purpose should be what drives you every day and provides you with the framework to make smart decisions that are aligned with your business goals. When evaluating next steps, new products, services or affiliates you should compare them against your company’s purpose. If they aren’t aligned then don’t do them.

PREPARATION

“By Failing To Prepare, You Are Preparing To Fail” – Benjamin Franklin

 Preparation is critical for long term growth throughout the business life cycle. It’s always good to be prepared for the worst, natural disaster, litigation, financial failure but it’s just as important to be prepared for growth.  Preparation starts with planning. If you have data, back it up. If you are getting ready for expansion make sure the systems you have in place can be duplicated. If you depend on one supplier, get a back-up in place.  Being able to manage change, good or bad, no matter what the circumstance can save you from devastation.

PROTECTION

“Making money is only as good as your ability to keep it.” –  Kevin Day, Esq.

 Running a business is risky, but you can greatly reduce that risk by establishing layers of protection between yourself, your business and your assets. The willingness to take risks is what separates entrepreneurs from the rest of the world but successful business owners know the difference between intelligent risk and waving the red flag. Asset protection starts with a strong foundation that separates out your assets. By utilizing a corporation or LLC you can eliminate the risk of putting all your eggs in one basket. Risk is part of business but you can greatly reduce the risk by putting the right pieces into place to ensure the continuation of your business into the future.

PASSION

“A person can succeed at almost anything for which they have unlimited enthusiasm.”  Charles M. Schwab

When you are able to align your passion with your business all of a sudden you start to manifest results. The passion for what you do, how you do it and who you serve will be the driving force to your success. The passion is what carries you through the tough times. If you are feeling lost, bored or stuck in your business, it’s time to reconnect with your passion. Take the time to listen to your inner voice, love what you do, embrace your calling and keep pushing forward.

PROFITS

“Entrepreneurial profit is the expression of the value of what the entrepreneur contributes to production.” Schumpeter, Joseph A.

Profits are the benchmark of business. Profits can only be obtained when the revenue out paces the expenses, taxes and costs of running your business. Without profit your business won’t last long so keeping a close eye on your expenses and profits plays a big part in the long term sustainability of your business. You should know the cost to produce every product and service you offer. How can you cut costs? Can you raise your prices? If there is an upsell service you can provide, would that add to your bottom line without increasing your costs? These are just a few of the questions you should be evaluating on a day to day basis to drive profit to your bottom line.

Operating a successful business starts with staying focused, having a plan and being prepared. The decisions you make should be centered around your purpose and aimed at fulfilling your passion.

Aaron Young, CEO of Laughlin Associates can be contacted at aaronyoung@laughlinusa.com, 1-800-648-0966, www.laughlinusa.com.

Why Do Most Entrepreneurs Fail or Fold?

The reason most entrepreneurs and CEOs fail or fold is the same reason they went into business in the first place. In fact, the answer to why most entrepreneurs and small businesses fail or fold is that they start with what they love or what they are very good at BUT they never build a solid business foundation to grow the business.

They unknowingly set themselves up for failure.

It’s the reason why the overwhelming majority of entrepreneurs (more than 90%) fail to achieve their dreams. They wind up failing, even if they have a great idea, buy lots of good products, tools and training, and read all the books in their field of expertise.

All this applied effort is essential, but working very very hard is not enough. And it’s not good enough.

I take it personally when I see so many businesses fail and fold when I know it doesn’t have to be that way.

  • I cannot sit by and watch so many businesses and hard-working smart entrepreneurs make critical mistakes in building the business of their dreams to achieve financial freedom. Especially in this wacky economy.


  •  I can’t keep quiet when the majority of entrepreneurs and CEOs have invested their time, energy, and irreplaceable net worth into the business to build an income plan, only to realize that it will never produce a wealth plan. 


  •  I am sickened that more than 90% of all entrepreneurs and business owners do not have an exit strategy. They blithely accept the inherent risks of not planning for the future by justifying that they are consumed with the present.

That’s why I write this blog, why I wrote my book, HARVEST Your Wealth, host my radio show, Exit This Way. I want to reach as many business owners as possible with a clarion call – that it does not have to be that way. And if you use these tools and resources, they can make a dramatic difference in the outcome for your business and your future.

Four Ways To Protect Your Turf

Warren Buffett famously invests in businesses that have what he calls a protective “moat” around them – one that inoculates them from competition and allows them to control their pricing.

Big companies lock out their competitors by out-slugging them in capital infrastructure investments, but smaller businesses have to be smarter about how they defend their turf. Here are four ways to deepen and widen the protective moat around your business:

 Get Certified

Is there a certification program that you could take to differentiate your business? A Canadian company that disposes of radioactive waste decided to get licensed by the Canadian Nuclear Safety Commission.  It was a lot of paperwork and training, but the certification process acts as a barrier against other people jumping into the market and competing.

Is there a certification you could get that would make it more difficult for others to compete with you?

Create an Army of Defenders

Ecstatic customers act as defenders against other competitors entering your market, a factor that has enabled companies like Trader Joe’s to defend their market share in the bourgeois bohemian (bobo) market, despite a crowded market of stores hawking groceries

Get Your Customers to Integrate

Is there a way you can get your customers to integrate your product or service into their operations?

The basic switching costs of Customer Relationship Management (CRM) software are virtually nil.  Everyone from 37signals to Salesforce.com will give you a free trial to test their wares.

The real expenses associated with changing CRM software only come when a business starts to customize the software and integrate it into the way they work. Once a sales manager has trained his salespeople in creating a weekly sales funnel in a CRM platform, try to convince him to switch software.

Can you offer your customers training in how to use what you sell to make your company stickier?

Become a Verb

Think back to the last time you looked for a recipe. You probably “googled” it.  Part of Google’s competitive shield is that the company name has become a verb. Now every time someone refers to searching for something online, it reinforces the competitive position of a single company.

Is there a way you could control the vocabulary people use to refer to your category or specialty?

Widening your protective moat triggers a virtuous cycle: differentiation leads to having control over your pricing, which allows for healthier margins, which in turn lead to greater profitability and the cash to further differentiate your offering.

If you’re wondering how differentiated your businesses is, take the 13-minute Sellability Score questionnaire and find out….

Business Owners Are Not Prepared To Sell, Scale or Cash Out

sellers' window

Irrefutable statistical evidence confirms that business owners are not prepared for the current market window to sell a business 2013 – 2018.

To take advantage of this sellers window, business owners need to get started formalizing a strong business foundation (e.g., strategic planning, contingency planning, succession planning, transition planning) at the same time as they balance accelerating growth and optimizing value in the business itself.

The research to date suggests that most business owners do not believe this strategic effort is important for them, their company, their  team or their family’s future. Just to recap:

  • In a 2008 research report entitled Business Transition/ Succession, research by ROCG Americas LLC confirmed that CEOs lack urgency because of the belief that “we can always do it tomorrow – a general feeling of invulnerability.” Survey participants’ No. 1 excuse for not having a written plan is still the same in 2013.
  • In the Canadian Federation of Independent Business (CFIB) survey in 2005, “the No. 1 reason given for not having a written plan was that it was too early to plan. This reply was head and shoulders above every other reason given.” Yet, this feeling is contradicted by the facts which show that time is not necessarily on the side of the selling owner.
  • Findings by the Mutual Survey of American Family Business in 2007 confirmed the statistical lethargy: “Almost a third have no plans to retire, ever; and another third report that retirement is more than 11 years away. Since the medium age of the current leaders is 51, this means that many people plan to die in office.”
  • PricewaterhouseCoopers states in its 2007 report on Canadian businesses succession plans that owners over age 50 “seem unwilling to seriously look into options to transition ownership before they are forced, by age or illness, to give up the business.”
  • A full 34% of the CEOs over age 60 in the ROCG 2008 study felt that it was still too early for them to plan their exit!

This “feet first” plan of going out with their boots on (providing no liquidity event, no succession planning, and no future for employees when they close the business) is prevalent. Not planning for the inevitable is equally absurd and irresponsible. And yet this is what 95% of all business owners do.

They are murdering their business. And it is totally preventable.

Change does not come easy or fast. To truly maximize the value of your business and walk away with the highest returns, you need to commit to a 2-5 year timeline that gives you the leverage you can’t get after a trigger event (health, family requirement, corporate or market changes, etc) precipitates your exit.

It’s never too early or too late to plan your exit. Our team at This Way Out Group LLC will take away the fear and frustration and facilitate the exit process and timeline with you.

Where to Start for Growth, Prosperity and Your Ideal Exit

“One of the first success lessons I learned as a teenager is that the majority is usually WRONG!  In his “Lead the Field” Program, Earl Nightingale said ‘if you want be successful and don’t have a good model to follow, then take a look at what everyone else is doing and do the opposite’…because the majority is usually WRONG!”  ~ Dan Kennedy

That’s the way I feel about goal-setting experts too. Their solution starts and ends with the goals themselves. They inspire and motivate. They offer insights on passion, vision, purpose and desire.

But that’s where they leave you – hanging. They don’t take you to the promised land of goal achievement for growth, prosperity and your ideal exit.

They may acknowledge and encourage the notion that implementation is the key. However, you are left to your own devices (strengths and weaknesses) to:

  • figure out how on your own
  • find the time to implement
  • actually take action to see results
  • inspire and lead your team to believe in the goal
  • stay focused, accountable and on track
  • pursue and achieve the goal of your transition to reinvention

That’s a tall order for any CEO business owner whose focus is on producing and selling a product or service.

I want you to have a sustainable, scalable, saleable business that produces more profits and more free time to achieve your dreams by working yourself out of day-to-day responsibilities. I want you to stop murdering your business like more than 95% of all CEOs and business owners.

We can help. If you know anyone who has questions relating to exiting their business, please forward my contact information to them. I’d be happy to assist in whatever way I can.

Where to Start, When Your Growth Stops

Why would two companies in the same industry, with the same financial
performance, command vastly different valuations? The answer often comes down to how much each business is likely to grow in the future.

The problem is that a lot of successful businesses reach a point where their growth starts to slow as the company matures. In fact, the price of doing a great job carving out a unique niche is that the specialty that made you successful can start to hold you back.

If you make the world’s greatest $5,000 wine fridge, you may have a successful, profitable business until you run out of people willing to spend $5,000 to keep their wine cool.

Demonstrating how your business is likely to grow in the future is one of the keys to driving a premium price for your company when it comes time to sell. To brainstorm how to grow beyond the niche that got you started, consider the Ansoff Matrix. It was first published in the Harvard Business Review in 1957 but remains a helpful framework for business owners today.

Sometimes called the Product/Market Expansion Grid, the Ansoff Matrix shows four ways that businesses can grow, and it can help you think through the risks associated with each option.

Imagine a square divided into four quadrants representing your four growth choices, which include selling

  1. existing products to existing customers,
  2. new products to existing customers,
  3. existing products to new markets, and
  4. new products to new markets.

The choices above are presented from least to most risky. In a smaller business, with few dollars to gamble, focusing your attention on the first two options will give you the lowest risk options for growth.

Existing products to existing customers

It’s natural to feel like you’re being greedy when you go back to the same customers for more of their dollars, but the opposite can often be true. Your best customers are usually the ones who know and like you the most and are often pleased to find out that you – someone they trust – are offering something they need.

Greg is a hardware store owner who came to understand the Ansoff Matrix. Greg earns a 150% mark up on cutting keys but his cutter was hidden in a corner of the store where nobody could see it. As a result, he didn’t cut many keys. One day, Greg decided to move the key cutter and position it directly behind the cash register so everyone paying for his or her hardware could see the machine. Customers started seeing the cutter and realized – often to their pleasant surprise – that Greg cut keys.

Not surprisingly, Greg started selling a lot more keys to his loyal customers. The key cutter didn’t woo many new customers, but it did increase his overall revenue per customer.

If you want to sell more of your existing products to your existing customers, draw up a simple chart of your products and services. Don’t be afraid to dust off those old products that you haven’t paid much attention to lately. List your best customers’ names down one side of the paper and your products across the top. Then cross-reference your customer list with your product list to identify opportunities to sell your best customers more of your existing products.

New Products to Existing Customers

Another approach to growth is to sell new products to existing customers. For example, there is a BMW dealership owner in the Midwest whose typical customer is a family patriarch in his forties. When he felt like he had saturated the market for well-heeled forty-something men in his trading area, he thought about what other
products he could sell his existing customers. But instead of defining his customer as the forty-something man, he decided to think of his customer as the financially successful family and his market as their driveway.

Instead of trying to sell more BMWs into a market of diminishing returns, he bought a Chrysler dealership so he could sell minivans to the spouses of his BMW buyers. He then realized that a lot of his customers had kids in their teens so he bought a Kia dealership to sell the family a third, inexpensive car.

Once you become successful, it can be tempting to sit back and enjoy your success. But in order to drive up the value of your business, you need to be able to demonstrate how you can grow, and the least risky strategy will be to figure out what else you could sell to your existing customers.

Qualifying Questions For Your Exit Planning Virtual Partner

 

Virtual Partner – Exit Strategist

When you are ready to ask for exit planning help – how to get out, where do you turn for help? You need to know if they are dedicated exit strategists or is their primary business in a related field or expertise? Here are five questions to ask potential advisors to determine if they will focus on your best interests.

1.   What is your specialty? What is your core business?

You want an exit strategist whose focus is exclusively on your optimal exit, who is not distracted by other disciplines.

 2.   How will you charge me for exit planning services pre and post transaction?

You want to know you are being charged for exit planning expertise and exit planning time, not attorney time to do exit planning. You need an exit strategist on board, engaged in your situation years before you need your attorneys, accountants, and wealth and insurance advisors.

 3.   How engaged will you be in my operational implementation and transition up to the transaction?

Leading up to the transaction, licensed advisors will be focused on the expertise they bring to the table. Their availability will be limited to help you with operational decisions and issues leading up to the transaction. After the transaction, you will need your exit strategist engaged to ensure your total integration into your reinvention lifestyle, but after the transaction, licensed expert advisors will move on to the next transaction. How much will they/can they be there for you?

You want an exit strategist who will be fully engaged in operational implementation, growth and optimization strategies, and your own transformation from operational president/owner to the strategic CEO of a stronger more profitable enterprise, not just the 6-month end game.

 4. Will you help me assess exit options and timing/tax/liquidity impact of each?

You need an exit strategist to help facilitate discussions with all your exit advisors to integrate their recommendations and tradeoffs for each exit option you are considering. Any of your transaction experts who stay focused in their own silo of expertise cannot provide the wider perspective you need to make the best decisions.

 5. What will you do to assist me in determining my reinvention plan and my goals and lifestyle beyond the business exit?

All the licensed transaction experts you engage for their expertise can ask you all the right questions, but they expect you to prepare and deliver the answers on your own. You need an exit strategist who will assist you in developing your reinvention plan and lifestyle beyond the exit, test it, refine it and lay out a blueprint to implement it from Day 1 of your reinvention.

Whether you engage the Exit This Way Out Group as your virtual partner or not, you need to use the materials, checklists, tables and guidelines provided here on the site and in our home-study course to make your business a wealth producing machine that will provide the financial independence you dream of to fund your reinvention.

Titles and Teamwork

Titles are important to understand the specialties, experience, and expertise advisors bring to your exit team. For exit planning, the attorneys, accountants, valuation experts, growth experts, wealth advisors on your team must be specialists in helping you cash out to achieve your goals, your dreams.

You can hire coaches to ask good questions and keep you accountable for the work to be done to plan and execute on your exit strategy.

You can hire consultants who can do many things for you: market research, competitive research, improve your sales results or reduce expenses to increase your profit margins.

It is essential to surround yourself with a team of experts who can collaborate (not compete with each other) to fulfill your goals and objectives on your terms, on your timeline.

That’s where I come in as a strategist. Sure, I bring coaching and consulting to the table, but my function extends much farther into your exit team, your organization and your reinvention.

I’m a specialist in engineering how you get the wealth out of your business. I’m an expert on preparing you, your company and your team for your exit to achieve your dreams. I’ve been hired by corporate leaders, fast-track entrepreneurs, royalty, family businesses, and multi-millionaires, among others.

You need your CFO, M&A attorney, tax attorney, insurance broker, wealth advisor, business broker/M&A/Investment Banker. You need all of them to get the deal that best serves all your goals for the team, your company and your future reinvention.  They are transaction driven and work for closure. That’s their primary focus.

In contrast, my role as an exit strategist is to prepare you the owner, your business and your team for the transaction and transition in the years leading up to that milestone event, and developing your reinvention plan so it unfolds just as smoothly after the transaction event itself.

Titles aren’t everything. The licensed experts on your exit team don’t get paid to help you maximize the value of your business before the transaction. They don’t get into the business fundamentals, the growth strategies, cleaning up the financials, contingency planning, protecting IP, employee contracts to tie the team to the company beyond your departure, succession planning, protecting and preserving your wealth goals, minimizing both your tax concerns and the company’s tax impact.

They are your trusted advisors. They will advise you to do all of the above. And for a fee, they’ll work with you on these things outside their experience and expertise. But it’s not their bailiwick. The data proves that this approach is failing you, the CEO. Only a dismal 10% of all sellers (business owner/CEOs like you) EVER close the deal, and complete the transaction in this model.

It takes 2-5 years to prepare you, your team and your business to transition to what’s next, profitably. That’s why This Way Out Group exists. This is the support, integration, and facilitation that an exit strategist from This Way Out Group provides.

If you have any questions relating to exiting your business, please email me. I’d be happy to assist in whatever way I can.

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