The Business Leader’s Dilemma
You hired what you thought are great people. Yet when they start working, you find that the results you wanted are not materializing. What is your next step? Fire them? Send them to a course? Wait till they figure it out?

Rob McGregor, Spirit West’s leadership coach says “Often it is not the person you hired that is the problem. It is that they have not received clear expectations nor had the opportunity to fully discuss what is needed. Or perhaps they did ask some questions but didn’t gain anymore clarity than before.”

What we notice with leaders is that they often think they have said what they want and in fact they have. But it was said once, it wasn’t a two-way discussion and what was said lacked the context of the bigger picture.

For instance, Rob notes that one client wanted his managers to organize their department so that they didn’t need as many people to do the work. Two months later, no changes were in evidence. The leader was frustrated and wanted to blame the managers for not following through.

Standing back from the situation, the following patterns are evident. Do you see yourself in this story:

1. The manager didn’t know what problem the reorganization would solve and how she would be able to do any better or differently without the additional staff member.
2. The leader did not explain his expectations and did not invite discussion as to how to achieve the result, what was important about it or how to go about making the change.
3. The leader waited and speculated about why nothing was being done rather than checking in regularly.
4. The manager fretted about losing a valuable employee.
5. The manager did not have experience reorganizing processes in her department. She was great at her technical skill not at process re-engineering.
6. The manager did not ask the right questions to get a full picture, did not assess what help she might need and did not ask for help in putting a plan together.

Hence, nothing happened. Who is responsible? Who is to blame?

McGregor helps business owners and CEOs deal with untangling these confusing situations. He says “The leader and the follower are both responsible for their lack of communication. Blame shuts down conversations so using it in the aftermath of missed expectations will not uncover the problem nor lead to a solution.”

The answer is no one is to blame. But both parties should be held accountable for working together on setting each other up for success.

And what would Clint do in the same situation? Stare himself in the eye and say “what are you going to do about it?”

Most companies are not saleable in their current state. With the flood of boomers poised to retire and rethinking their futures, many owners think they can find a buyer when they finally feel like selling. With 50% of every business in North America owned by boomers, it is a buyers’ market, and they are choosy.

Fast Track Secrets for Making Your Business Saleable is the first book to show business owners what is in the minds of investors and acquirers when they look at buying or financing a company. Owners will learn and develop a plan for the four steps to making their businesses saleable so they will attract the right kind of buyer.

Coming Soon: Publishing date September 15, 2011. Want to pre-order your copy? Send your request to info@spiritwest.com Can’t wait that long because of your time frame to retirement? Go to www.MakeYourBusinessSaleable.com

Here is what the experts are saying about the McGregor’s book and workbook:

Every Private Client Advisor (or wealth advisor, relationship manager) should provide their clients who own a business, a copy of this extraordinary book….

This book is a fantastic breakthrough resource for preparing to sell your business at maximum value.

If your client owns a business, they need to have this book…they will thank you endlessly and never move their wealth to another advisor ☺

Thomas R. Sweet, Former VP Consumer Marketing, City National Bank, Beverly Hills, CA and Former VP Marketing, Nevada State Bank

Supply and demand are critical to every business owner. You started your business to be able to supply a product, or service, to fill a need in your marketplace. Once you start to plan to sell your business it’s the SAME thing!

You will need to once again become part of the supply-demand chain and if you are not properly prepared, the buyers will quickly move on to a business that is. It’s your choice. No, it’s your responsibility…to actively and aggressively plan for that date one day when you will be ready to sell out to the best possible buyer at the best possible price.

Randy West, Certified Financial Planner, The Villages, Florida

In my view, to maximize enterprise value, the key thing the seller needs to have sorted before they start a process to sell their business is to have thought through and implemented an organizational structure that does not include them.

Too many times in small owner-managed businesses, the roles and responsibilities are not well-defined and ultimately every key decision comes to the owner or his right hand person. That is not a scalable business model which sophisticated buyers will see and thus feel the need to bring on additional management resources which is an additional cost to the business.

Martin B. Carsky, CEO Con-Space Communications, Ltd and former EVP, Anthem Capital

Insightful! What a great roadmap for maximizing the sale of a business. As a business lawyer, we often see overwhelming challenges for business owners who do not prepare for the sale in advance. An ounce of prevention is worth a pound of cure and there is a ton of information in this book that will help sellers quickly turn their business into one that is “saleable.”

I plan on recommending this book to every client who is thinking about selling a business or even just starting a business and wants to build it right from the start. Not only will it make business owners smarter about selling a business, it will make them smarter about running a business!

Roger P. Glovsky, Esq. Venture Attorney, Indigo Venture Law Offices and founder of the Seminar ‐ “How to Save Thousands of Dollars on Legal and Professional Fees by Preparing in Advance for the Sale of a Business”

“Fast Track Secrets for Making your Business Saleable is an outstanding roadmap every owner or manager selling a business will want, to control the process and maximize returns. Suitable for any type of business, this step-by-step approach teaches the business and mindset requirements for success, including ‘what you don’t know that you don’t know’ which can jeopardize results. Buy this book if you want maximum profits and peace of mind!”

Susan Rosenthal, President World Markets Group, Former Vice President, Global Marketing CitiBusiness™ for Citigroup

“We’re ready to sell. You know, we’ve kind of done all we can and we’re tired. It’s time for some new blood. So my partner and I want $5 million out of the business. So what are our chances?”

We listened to Trevor a proud and accomplished silver haired 59 year old , the owner of a 15 million dollar industrial company and wondered whether he and his 58 year old partner, Paul realized what getting that exit buyout would require on their part.

“There is only one way you are going to find a buyer willing to invest that much in your business. It’s called Exit Planning and it may take 2-4 years to complete before you’re ready to sell.” I looked over
at my consulting partners as we watched Paul and Trevor’s faces fall. We had seen this reaction many times before.

There is nothing more painful than seeing successful business owners suddenly realize their retirement dreams might remain only a fantasy.

With every phase of life, the baby boomers have had a profound influence on the movement of money across most aspects of our economy. But in their next phase of development will their luck with creating wealth run
out?

The numbers suggesting this is indeed possible are staggering.

By 2011, the first of 70 million boomers are going to turn 65 years old. There are more than 26 million businesses in North America, and 50 percent are owned by boomers, according to the Small Business Administration. And 7 out of 10 of these owners will want to sell their business over the next 10 years, according to the Association for Mergers and Acquisitions Advisors.

That represents $10 trillion in retirement value and 75 percent of that $10 trillion may not be realized according to Richard Jackim in his book “The Ten Trillion Opportunity – Designing Successful Exit Strategies for Middle Market Business Owners”.

Industry Canada and the US Small Business Administration are very concerned that boomer business owners are not paying attention to these statistics and secondly do not have a good understanding of what it takes to sell a business. They have alerted city economic development groups across the country like the City of Nanaimo, BC and the city of Chicago, IL who are now trying to come up with ways to alert owners and help them to get ready.

They are planning for the future to ensure their communities stay economically buoyant according to Jason Boyce in an article entitled “Get Ready for the Big One: Succession Facilitation & the Coming Demographic Wave of Change” published in Making Waves Magazine.

Spirit West Management advises owners what must be done to 
set their house in order.

“It’s much more than succession planning,”
says Lorraine Rieger McGregor, CEO and partner in Spirit West
Management. “It involves reorganizing the company so that an investor
 sees the value. That sounds easy but really what is involved is to stand
 in the shoes of a buyer and ask yourself, would I buy this company? Can 
I easily see that it will continue to grow if the owner leaves so that I
will benefit as the investor? Succession planning is all about how you
 will retire. Exit planning is all about how the business will continue to be successful after the owners leave, which is all important to buyers.”

Rieger McGregor of Spirit West offers these five tips for business
owners who are starting to think about finding a buyer in the coming
 years. First Tip? Start NOW.

1. Change Your Mind Set
Let go of your business now, emotionally. It’s not a reflection of who 
you are; it is an asset that has investment value. The more you can view 
your business from the eyes of an investor, the easier it will be to
make the transition to improving it so it will be attractive to
investors. This is not to say stop being passionate about your business,
it says let it stand on its own two feet.

2. Think Like a Buyer
If you were to buy this company tomorrow, what clues would tell you that
 it would continue to be a successful company? What would you look for to 
tell you that if you didn’t know anything about the company? Buyers want
 to see past evidence of growth: The plans, the result and the effect on
profits. They want to know the industries your company sells to are hale
and hearty especially in this challenging economy. Are your customers 
loyal, buying more regularly and getting your best solutions? Do you
 have a sales pipeline leading to increased revenue? What tools do you 
use for decision making? All of these things show a buyer you run a 
tight ship.

3. Transfer Knowledge and Power
Who will run the company if you’re not there? Can you disappear for six
weeks right now and be sure the company will still be humming when you
return? If not, you’ve got work to do. You may need a management team or
a CEO. You may need to start training and trusting your own people a lot
more than you do now. When you walk into your operation is the
atmosphere tighter than a drum or congenial, tense or excited? How come?

4. Clean Up the Files
For the next three years you’ve got to show increasing profit margins in
a consistent, steady uphill line. That means you will have to clean out
the personal items in your expense account, know where you are missing
 the mark and losing money and fix the problem and then set goals and 
targets that your team is accountable for. Then look at your agreements 
and contracts and get them reviewed by a lawyer. Do your supply 
agreements restrict geographic territory or activities? Do you have the
best suppliers on your team? Are your shareholder and management 
agreements tight or misunderstood? Get the right kind of help to sort
these problems out.

5. Focus on Growth
When was the last time you expanded your market place, launched a new
product or rethought your solution set to better meet customer needs? Is 
it easy for customers to switch from your product to some other company’s?
If so, you better find out why. Get to know your target market. Are 
you solving their problems in the right way? There is opportunity for a
 profit in every hassle you uncover in their business.

Buyers want to see a healthy pipeline of orders and opportunities for
the future. “This is not meant to tell owners what they’ve built isn’t
good enough.” Says Rieger McGregor. “It’s to let owners know that there
will be a huge number of businesses all wanting to sell in the coming
 years. Investors will have their choice of plum opportunities and will
 reject the rest. They will pick the investments where their risks of
 failure have been reduced. Owners need to know how to make that sense of
certainty obvious and reliable.”

It can take 2-4 years to sort out some of these issues. The time flies 
fast. Don’t be resistant to this effort: There’s a business to run
 and there might not be “know how” or time to try and get these ‘value’ 
improvements done properly and without business disruption. But investing the time gives both you and your employees a bright and prosperous future.

Exit planning and execution is something owners will need help with. You may
 need a consultant familiar with exit planning that can help plan and execute these change. Your accountant can devise the best tax strategies. Your lawyer will iron out the agreements and contracts and your board of
advisors should be challenging your decisions and holding you accountable for implementing plans. Then you know you close to having a saleable business.

If owners want to see their retirement plans realized, the time is now. Over the next few years it will be a buyers market, with many more competitors wanting that big exit payoff too.

And what of Paul and Trevor. They are one year into their reorganization and have found a new passion for their business. They know what they want and unlike their competitors, they are well on their way to becoming the right acquisition target for a buyer.

And they aren’t tired anymore.

Lorraine Rieger McGregor was interviewed by the “It’s Your Money” radio hosts, Raymond James’ Randy West and Gregg Collier for WLBE AM790.

The 25 minute show on how business owners can adequately prepare the business for the highest valuation focused on the fact that with the baby boomer boomer bulge nearing retirement, the number of businesses coming up for sale is set to increase by 100%.

This fact means those company owners wanting to sell or transition ownership will have to do a lot more than just “paint and install granite counters” to find an investor willing to buy them out or a lender able to bankroll a management buy out.

click the icon at the top of this article to play the radio show

Ready to start acquiring companies? Already acquired a few and are wondering how to fit all the pieces together? Acquisitions are a great growth strategy. They also require a level of management and leadership as well as strategic thought that is much more complicated than running the original company.

What’s difficult? Making the right choices for your investments is only half the equation. Many companies erode the value they bought in the first three months by making decisions about how to integrate the company without first assessing impacts, checking assumptions and making a clear plan in consultation with the leaders of the acquired company. Just because your company is the buyer does not mean your methods are the best. Assimilation is not necessarily a smart business strategy.

Read on about how we’ve helped other companies learn to acquire and integrate companies successfully. Want to know your Acquisition IQ? Call 604-306-7707

Acquisition Case Studies

• How Do You Combine All the Products?
• Maximizing the Value Post Acquisition
• Cross Border Integration Irritants: You Change First

Managing costs is of course important. Of greater importance is understanding how to increase your gross margin and your offering to the market place. Can you say for sure whether your top ten customers will keep buying year after year from you? Do you know which products make you money and which don’t? Is revenue one off or reliable? Would your customers tell you if aspects of working with your company are a hassle?

There are opportunities for growth where you would never know to look. Want to find out how to rebalance your company and get off the plateau? Call 604-306-7707

Company Growth Case Studies

• Is there a Growth Path for a 20 Year Old Product
• We’re Growing Faster Than Our People Are
• How to Increase Distribution in a Fragmented Market

Manufacturers face unique challenges in this economy. Outsourcing is popular but difficult to manage. Transportation costs are constantly increasing. Workers are not as interested in careers in these old-line types of businesses. However, manufacturers are the backbone of our economy.

Our client companies needed smart efficient and fast growth strategies. Our approach is to ensure there are no disconnects between what the customer expects as communicated to the sales team and what they ultimately receive during installation and post sale follow up. There are a lot of steps in the process with opportunities for the ball to be dropped and the message to change. How does working on these internal issues forge growth in profits?

Read on. Here is a partial selection of the kinds of companies we helped grow. Need help getting growth from your manufacturing operation? Call 604-306-7707 to explore your options.

Manufacturing Case Studies

• A 90 Year Old Manufacturer is Purchased and Downsized. Is there a Future?
• Can Commodity Product Producer Differentiate for Better Profitability?
• Greening a New Product in an Old Line Business