Ensure a Better 2024 by Managing Internal & External Uncertainty

Nov 28, 2023 | Employee Retention, Employees, Exit Planning, Financial, Growth Tips, Income, Management, Planning, Pricing, Strategy

I recently spoke with Ron Edmonds, President of the Principium Group, a leading mergers and acquisitions firm serving the Green Industry.

Ron and I were prepping for his talk at my Financial Master Class, chatting about how a company’s “value” is driven in part by removing the uncertainties in the business.

The lower the uncertainties, the higher the value.

Business Uncertainties can be split into two groups: internal and external.

Our conversation on uncertainties reminded me of the Serenity Prayer:

Grant me the serenity to accept the things I cannot change, the courage to change the things I can, and the wisdom to know the difference.

My version: Know what you can control internally and externally, and focus intently on those elements in your business; don’t stress on the rest.

With that in mind, here are a couple examples to get your mind turning:

Remove the INTERNAL uncertainties.

1. Keep the team updated on how your company is performing.

If you remove the questions (uncertainties) that your people have about the company’s performance, you can also empower them to help meet and exceed your goals.

Removing this uncertainty is win win.

2. Share your longer term vision, so your team knows where you are going.

You may know where you are going, but your team is uncertain.

Keep sharing your vision over and over (even if it stays the same).

Never let your team wonder “has the owner changed his/her mind?”

3. Keep your team apprised of your succession plans, if any.

Especially if you are close to retirement age, your team is already talking amongst themselves wondering what you are going to do.

So remove the gossip and the angst, by clueing in your team.

4. There are always staffing uncertainties.

They can be dealt with in many ways including cross training and multiple people in a given position.

For example, set up a larger sales team (minimum 3 people) instead of relying on just one great salesperson.

Do this where practical as you scale.

Remove the EXTERNAL uncertainties.

1. Don’t rely on a super niche, of “one type of client with one type of service”

If your business depends on a super niche, then you have created an “all or nothing” investment which will be buffeted as the market changes.

“You will do great until you don’t!”

Your stability and value is enhanced when you have either a diversified service or client sector.

2. Don’t rely on one type of marketing.

Ensure your new-client sources are diversified.

The best example: It’s great to have a stream of referrals, but only as a base. Referrals are not marketing.

Become a marketing and business-development expert.

This includes becoming savvy at marketing to your existing clients (up sales) as well as for new clients.

3. Don’t rely on a steady state economy. Have a plan B.

This is especially true if you rely on install work.

If the market softens for new work, what will you do?

Drost Case Study: For years I worked with Drost (Petoskey, MI). They were the gracious host of our ’22 Summer Growth Summit. When I first met them I pounded the drum of diversification. Don’t over rely on the big whales coming your way.

I beat this drum early and often, and over time they built up an innovative, powerful services division that equals their design build.

Nothing lasts forever. Except your ingenuity.

Your challenge: Understand and focus on what drives the value of your business.

Even if you don’t plan to sell your business anytime soon, it’s just good win-win business sense to fortify your value.

The second best time to plant a mighty oak rree is right now. Get going!

Regards, Jeffrey Scott

 

Come hear Ron Edmonds talk about this subject of building business value at our Financial Master Class.

Early bird ends in 3 days on Friday! Register now.

4 for 3 discount: Buy 3 tickets and we will give you the 4th one. Email us for the ticket.