I must have missed the class where they taught us to dream big, that dreaming is important, and, most importantly, how to dream big.
Maybe in all our education and early jobs we focus on the here, now and how a little too much. Maybe our elders want to prepare the majority of us for sustainable, productive jobs which will earn us a living. Maybe we are just too busy with what is going on around us, and we forget to look inside ourselves and envision our own future. Maybe it is the Matrix?
My father said to me a few times when I was growing up that “today is not practice.” This life is the only one you get, and if you do not live it the way you want, the way you envision, the way you dream, then you will regret it in the end.
How do you learn to dream big again?
So, the question becomes, how does an entrepreneur, business owner or anyone for that matter, stop what they are doing, turn off the merry-go-round, and get down to dreaming big again?
One thing to do is take your goals (you have those handy, right?), and multiply them by five.
Why five? Who knows? My point is, your goals are not set high enough.
For anyone who has been trained in negotiation techniques, you know the strategy of high, medium and low pricing. As a seller, there is a high price you start with, there is an intermediate (perfectly acceptable) price that you would be happy to get, and there is a rock-hard bottom line price that you will not go below under any circumstances. If it comes to pass that you cannot get even the rock bottom price, you are prepared to walk away from the sale instead of selling at a price at or below your rock bottom price.
If you are a salesperson, you start off a negotiation with a certain figure (price) with the knowledge that you can easily come down off that price and still be very satisfied in the result. You are prepared for a little give-and-take with your prospective buyer, so that you can try to come to some sort of happy agreement between buyer and seller.
Most people, if they set any goals at all for themselves, generally set goals they are confident they will easily achieve. Why? Well, it certainly would feel better if you achieve your goal than it is to miss it, right?
Yes, you’ve nailed your goal. Congratulations! You are now the proud owner of a middle-of-the-road, pure vanilla, average existence. You’ve achieved an absolutely meaningless goal.
At least you can be satisfied that you made your goal!
Set the Stretch Goal
Why not set a big, lofty wonderful dream of a goal for your business (and your life)? Sure it would be hard to achieve everything that you picture in this made-up dream. Maybe you won’t end up with 5,000 employees or $10 billion in revenue or own castle in France or London (or whatever your particular dream). That’s not the point.
Maybe you just end up with a successful business with 50 employees and $20 million in revenue and a paycheck of a half million dollars.
Even though you did not reach your “stretch” goal, it certainly would be no failure in the end.
There is a great book called “Write it Down, Make it Happen” by Henriette Anne Klauser, which discusses the incredible power of written goals. (see on Amazon here: http://www.amazon.com/Write-Down-Make-Happen-Knowing/dp/0684850028). In this powerful book, the author gives example after example of people who have written down their goals, and even lost or forgotten all about them, only to find out some time later in life that they had actually achieved – or surpassed – their biggest goals!
By the way, this is the precise purpose of business plans. Write it down, make it happen. Yes, indeed.
Remember what one of the most successful entrepreneurs in American history, Andrew Carnegie, said over and over: “If you can dream it, you can achieve it.”
It is the power of the mind, along with hard work, which will get us to our destination. You determine the destination, whether it high, medium or low. What is your dream?
Interim & Part-Time Chief Operating Officer Services
The management of a successful, thriving business requires the application and commitment of a wide range of business skills. It also takes the combined energy, ideas, focus and expertise of experienced, knowledgeable executives.
To truly succeed, entrepreneurs should spend their valuable time and energy on what they are expert at, and delegate other responsibilities to the best resources available.
This is where Endorphin Advisors can help.
Know What You Know, and Know What You Don’t Know
Time and money are perishable resources. Why not focus your time, energy and attention on what you know best, where you can be efficient, and focus on where you can have the most impact?
Endorphin Advisors provides Interim and Part-Time COO Services which can help a business owner most effectively run their business, while freeing up valuable time and money to build the business.
Endorphin Advisors helps manage business development issues, strategic planning, product development, pricing strategies, revenue and expense forecasting, margin optimization and strategic marketing strategies.
Chief Operating Officer (COO) Services
Our COO services include:
Increase Margins with Cost Effective Solutions
As experienced business advisors, we can be highly cost effective, too. Imagine hiring a senior, experienced executive for strategic planning, business development and management activities. How much would that cost? Why not just pay for the hours that you need, when you need them?
Exiting Through Succession Planning
by Colleen A. Dooley, Esq., The DiFabio Law Firm, P.C., firstname.lastname@example.org
Succession planning is a specific exit strategy. An exit strategy involves a business owner removing her- or himself from the business regardless of whether the business continues. A succession plan is an exit strategy that involves a business owner transferring the business to a third party to continue as a going concern. There are two options as to who will be the successor that I will discuss in this article:
Unrelated Third Party
There are two methods by which a business can be sold to an unrelated third party.
Both of these scenarios are arms-length transactions that will likely require listing the business for sale with a broker or having sufficient contacts within the industry to independently find a third party buyer. If selling to an unrelated third party is your exit strategy, then your primary goal will be to build the business up to be as attractive as possible for sale.
Related Family Member
There are essentially two methods to transition a business to the next generation in a family:
This is where it gets complicated. If you’re a small business owner, chances are that your children, or nieces and nephews, grew up around the business, possibly worked at the business as employees, and have a unique familiarity with its operation. Maybe you are a second or third generation owner of the business yourself. But, what if you have a co-owner? Does your business partner want to co-own the business with your children?
Many small business owners choose to transition ownership of the business to the next generation during his or her lifetime. In the situation of a corporation or LLC (and assuming there is only one shareholder or member or a co-owner who is not opposed to the transition) the business owner could make an annual gift of shares or membership interest to the next generation. Depending on the value gifted, an annual Gift Tax Return may or may not need to be filed to track the business owner’s use of his life-time exclusion amount. In the situation of a sole proprietor, gifting of an interest in the company would result in a de facto partnership which would necessitate the involvement of an accountant or attorney not only for Gift Tax reasons, but also to prepare and file an annual partnership tax return.
If a business owner does not want to transition ownership of the business to the next generation during his or her lifetime, the business owner could prepare a Last Will and Testament to give the business to an identified heir.
However, if a business owner is in a partnership or a multiple person corporation or LLC, discussions need to be had with the co-owner about transitioning the business to the next generation and the financial “how” of the heir taking over. What if the other business owner does not want to be business partners with your children? What if the other business owner does not have another generation that is interested in succeeding him or her in the business? How will your heirs be able to afford to buy out those shares? The short answer is that one of the following three buy-sell agreements will need to be used:
As you may gather from some of these questions, when a business is owned by multiple people, transition to the next generation of ownership can become complicated and involve multiple buy-sell agreements and ownership of life insurance policies on each of the shareholders, owned by either the other shareholder(s) or the corporation. Such planning requires the skill of an attorney, to structure the succession plan and estate plan, working with an insurance professional who is familiar with insurance products for succession planning; an accountant to ensure that tax returns are being filed for the appropriate business structure taking into account the life insurance; and a business valuation expert to determine how much the business is worth, which would be helpful in determining the amount of insurance to purchase.
As a business owner you need to have an exit strategy and develop a team of experts to assist you in either selling your business or passing it along to the next generation.
Colleen A. Dooley, Esq., Attorney
The DiFabio Law Firm, P.C.
4 Automation Lane, Suite 100
Albany, New York 12205
Email: <a href=”mailto:email@example.com“>firstname.lastname@example.org</a>
Center for Economic Growth
15th Annual Technology Awards
June 29, 2011
Crowne Plaza Hotel, Albany, NY
Keynote Speaker: Jon Gordon
Jon spoke of the 4 critical qualities needed for successful companies, which are:
3. Trusting Relationships
He also drew a comparison between the need for these characteristics in successful businesses as well as in a successful regional economy. He was specifically complimenting CEG, Tech Valley and the valuable local business culture we have here in the Capital Region of upstate New York.
Many other speakers, including award winners, spoke of two additional ingredients evident in successful businesses, which are passion and persistence.
Inspirational, well-attended awards event in Albany, from which I came away full of endorphins.
Time to get back to work!
Here is a run-down of the 2011 CEG Tech Award Winners:
PROMISING NEW START-UP, Carma Systems, Inc. (www.carmasys.com): An aspiring high-growth start-up company whose venture is showing promise.
ECONOMIC WINNER, Autotask (www.autotask.com): A company that exhibits substantial and sustained growth in sales and profitability, contributing to the overall regional economy and employment.
TECHNOLOGY IN PRODUCTION, Automated Dynamics (www.automateddynamics.com): A company that has developed or utilized new technology to significantly improve its production processes.
TECHNOLOGY MENTOR, Amy M. Johnson, President, Capstone, Inc.: An individual who champions the vision of Tech Valley, as well as offering their time, expertise and knowledge networks in support of individual technology companies.
TECHNOLOGY ENTREPRENEUR, Stephen J. Petti: An individual who has contributed to the development of the technology economy through the formation of new businesses, generation of wealth and exemplifying the risk-taking entrepreneurial spirit.
LEADERS OF TOMORROW, Lindsay A. Tucker, Greane Tree Technology and Ted Ottey, Intellidemia: A student intern who has made a significant contribution to his or her company going above and beyond the expectations of his/her employer.
Since 1987, the Center for Economic Growth (CEG) has been committed to fostering visionary economic growth throughout the 11-county Capital Region, as well as a significant portion of the Tech Valley corridor.
As a private, not-for-profit organization we work with a diverse group of members and partners to advance the ability of the region and its assets to succeed in the global marketplace. With a focused and strategic approach we work to:
1. GROW local companies by offering tactical business development strategies and services;
2. ATTRACT opportunities for technology investment and expansion throughout Tech Valley, and
3. PREPARE communities to achieve their desired economic growth while enhancing the region’s excellent quality of life.
In addition to support from its dedicated members, CEG receives funding and resources from the NYS Foundation for Science, Technology and Innovation (NYSTAR), New York’s high-technology economic development agency, the National Institute of Standards and Technology (NIST) / Manufacturing Extension Partnership (MEP) and National Grid. Learn more at http://www.ceg.org/.
Successfully Differentiating Yourself Should Be A Clear Priority
In the eyes of potential customers, you look just like your competition. You’re a mechanic, acupuncturist, insurance broker, banker, PR pro, IT guy, consultant or designer. You are broadly defined – like a ghost – and there are lots of you to choose from.
That thought should scare you and keep you awake at night. I’m not kidding. If that is how your customers think of you, your chances of winning business are truly slim.
First impressions stick, so you need to carefully craft the image and message that you present about yourself and your business. Even more challenging, this message must be consistent, dynamic and effective coming from you, your partners, your staff and even your customers.
“If you stand for everything, you stand for nothing.”
It is better to put stake out a very specific service or type of customer you serve, than try and cover all the possible services you provide and customers you might serve. Even if you think it is too narrow and doesn’t include all the great services you provide, you need to identify something particular that people will identify with you, something by which to remember you.
What “variables” can differentiate your business?
Here’s a quick list of possible differentiators:
1. Type of customers you serve (industry, size of company or any other attribute)
2. Lifecycle of company or industry (new/start-up, growth, leader, mature)
3. Services you provide
4. Level of services (First class service included in price or no-frills)
5. Cost structure (high, low or market)
6. Focus on new clients or existing clients
7. focus on fast-moving, aggressive clients or more conservative or old-fashioned clients
8. Geographic area of service
9. In-person service, store-based, virtual or phone
10. fast sales cycle or slow sales cycle
There are almost an unlimited number of ways to describe your company and services, your customers, and how you serve them. You can even call yourself a pioneer in a field, if it is specific enough, and there are few, if any, competitors in the field you describe.
Defining your marketplace is critical but can be very liberating. Why not try to become known as the best web designer serving personal lines insurance agents, in California, servicing high-tech companies, with less than 5 employees? Sure, that’s an extreme example, or is it?
Endorphin Advisors is a unique management consulting firm and marketing agency. We help businesses develop and implement short and long-term strategic plans, while also providing day-to-day business development, marketing and financial forecasting services to select clients committed to aggressive growth.
Endorphin Advisors specializes in Internet (inbound) marketing; online lead generation and nurturing strategies; content development strategies; and development of the web properties required for effective inbound marketing, including web sites, blogs, social media and email marketing tools.
Endorphin Advisors was started in Silicon Valley in 2005, and re-located to Albany, NY in 2011. Find them at http://www.EndorphinAdvisors.com
Why is planning so important? Time
The act of planning, whether in business, for a trip, or just planning out your day, is important because of time.
As we all know, time marches on regardless. In business, that means your expenses march on regardless of what is happening on the “revenue” side of the operation. If your revenue side does not exceed your costs (expenses) side then you lose money. This is a scenario that cannot go on forever. For small businesses, particularly those with limited resources or without other sources of revenue, this will inevitably lead to the failure of the business.
“The plan is useless, but planning is essential.”
– Dwight D. Eisenhower, Supreme Allied Commander of Forces in Europe during World War II and 34th President of the United States
To use a mundane (yet very attractive) example, think about planning a ski trip to Chamonix, France. Very few people have the resources, flexibility and, frankly, the personality to conceive of the idea of a ski trip to France (if they live in, for example, San Francisco, California) and just take off the next day for a week (or month) in this amazing French mountain paradise 5,864 miles away from their – well, my – home (yes, I checked Google maps).
Most normal people would need to plan a vacation from their jobs, coordinate schedules with their family, buy plane tickets, research and book lodgings, and perhaps spend some time saving up some money or researching what else they might do when they are not hurling themselves down some of the most treacherous slopes in the French Alps (or recovering from said hurling).
In other words, taking a trip like this would benefit from some amount of planning
Now, all but the most diligent people are probably not going to write up a Business Plan (or in this case a “Trip Plan”), but most people will do some amount of research, preparation, planning and even dreaming well before this trip happens. You might make a list of things to do (goals), create a budget (forecast) and check the calendar (timeframe) to coordinate schedules. You’ll probably share this info with family and your boss, and maybe a friend or two for the jealousy factor.
Planning a big trip or other large projects are not unlike building, or selling, a business
Business planning of course is far more complicated than planning a trip. It is also a far more critical and difficult discipline when related to building a successful business venture.
In my experience working with, talking with, and researching, the activities and operations of small business owners and entrepreneurs, two clear deficiencies appear. Those are, first, the lack of effective, disciplined business planning and, second, the lack of available resources.
Unfortunately, those two items go hand-in-hand when it comes to running a business. If you foolishly use up your available resources (or fail to appropriately and carefully consume those resources), then you vastly increase the odds of failure.
Why Not Plan?
Why is it that so many small businesses do not adequately plan out their expenses and revenues, and make the appropriate “business model” work out, at least on paper?
I think it is because it is hard work to create a real, comprehensive business plan. It is time consuming, minute in detail, abstract and requires discipline. It requires careful thought and a great deal of creativity to imagine the future and see where you might be able to take your business over some finite period of time. There is also implicit accountability that some might find unappealing.
“If you can imagine it, you can achieve it”
– Andrew Carnegie
Let’s go against the grain here and challenge ourselves to perform at a higher level than we believe possible. Andrew Carnegie was an innovative thinker in his belief in the power of the imagination and the importance of written goals. (See an extraordinary book from Henriette Anne Klauser called “Write It Down, Make It Happen.”)
How about using the business plan to set out some goals that stretch the limits of what we believe we can do? Wouldn’t it be exhilarating to revisit these goals and to see what can be achieved? Perhaps to see some of the goals we have achieved that we only dared to dream?
Wouldn’t that exhilaration be worth a little work in the business planning area today?
“What Are You Prepared To Do?”
As my father used to say, and sometimes still does, “this is not practice.” This life we lead today is the only life we get. This is not practice. Or to fall back on one of my favorite sayings, which comes from Sean Connery in the film, “The Untouchables,” “What are you prepared to do?
I love that line. Maybe it can spur some of us on to set high goals and work like hell to try and achieve them. Now, that would be a worthy goal.
What Are You Prepared To Do Now?
Feeling some energy from this article? Contact us Today to Take Your next Big, Bold Step Forward!
Planning To Cash In Your Business For A Comfy Retirement?
Small Business Owners Have A 1 in 4 Chance of Successfully Selling Their Business.
Read on to find out some of the things that make small businesses less desirable than larger businesses, and this will give you some ideas about how to prepare your business to be sold.
Here are some statistics on sales of businesses in the U.S.
Source: CABB & Tom West
This means that if your business has less than $750,000 in annual revenue, there is less than a 1 in 5 chance that you will be able to sell it. Even once you get up to $2,000,000 in sales, there is only a 1 in 4 chance of selling your business.
This means that the higher the revenue, the better chance of selling the business.
This is not so much just a revenue target, but reflects the fact that larger businesses have some things that smaller businesses generally do not:
If your retirement plan and golden years are relying on you successfully selling your business for a nice, big chunk of cash, you may have some work to do between now and then to increase your odds of achieving that comfortable, leisurely retirement.
Learn more about exit strategy planning and some of the things you can do before you try to sell your business that will attract buyers to your business.
Please let us know if you have any questions.
Thank you for your time and interest.
In this new video, Erik Bunaes from Endorphin Advisors discusses the philosophy of Endorphin Advisors and how our unique, consultative and coaching-oriented approach to management consulting has brought new energy, confidence, clarity and success to our clients.
For more information about Endorphin Advisors, please see the following venues:
Web Site: http://www.EndorphinAdvisors.com
Endorphin Blog: http://blog.EndorphinAdvisors.com
Thank you for your time and support.
Endorphin Advisors adds new video on its Flagship web site at www.EndorphinAdvisors.com.
In new video, Erik Bunaes, President & Principal, discussing Endorphin Advisors’ services, capabilities, experience, team and web properties.
More videos are on their way.
Thank you for your interest and support.
We Boil Down The Most Difficult Decision Every Business Owner Must Make At Some Point In Their Lives
One of the single most important calculations to a business owner at some point in time, particularly when contemplating their retirement or “end game,” is the balance between “what is my business worth?” and “will that be enough to comfortably meet my retirement needs?”
In most cases, both of these figures are relatively vague – or completely unknown – numbers when the typical business owner begins to factor in the variety of economic, business, financial, personal and estate planning variables that likely have an effect on those two main figures.
Value of Business Side of Equation
On the “what’s my business worth today?” question, the true value is what a buyer is willing to pay for your business at a given time. Potential buyers will take into consideration all kinds of factors including:
This is not an exhaustive list, but you can see some of the different factors affecting the value of a business from a buyer’s perspective.
From the seller’s perspective there are the inevitable “what’s the multiple for my business” question. That refers to vague rules of thumb such as “X business is worth 1.5 times revenue” or X business is worth 2 times EBITA, net earnings or some other units of measure.
The problem with rules of thumb is that they vary from industry to industry and company to company. More importantly, they are vague and often misleading.
The right route is to obtain a certified opinion of value (COV) from a certified business appraiser. For a generic small business, this examination should run in the $4,000 to $6,000 range (higher or lower depending on size of business, it’s complexity, and the appraisal firm engaged). For larger and more complex businesses, the cost can be multiples of that cost.
Just remember that a “certified opinion of value” is an opinion of value and not a sale price. While the COV is based on objective analysis and uses direct comparison to relevant, current industry data, the actual “value” of a business is the value of it in the eyes of the buyer. There is no guarantee that you will get a sale price as high as the opinion of value. You might get higher. Or lower.
Retirement Needs Side of Equation
Now on the other side of the larger equation of “should I sell now,” is the “how much do I need to comfortably meet my retirement needs?” question.
For this side of the equation, it’s prudent to address this in consultation with a qualified wealth management professional. There are many variables and scenarios that should be included, along with some detailed financial calculations (net present value of money, estimated investment returns, estimated interest rates, projected taxes, etc.), to do this with any accuracy.
Steps Forward to Addressing Equation
To avoid the vague soul searching of “should I sell now” and “how much is my business worth,” the two gut-wrenching parts of this decision, there is a relatively clear path forward.
The solution is to seek the counsel of two qualified, experienced experts: a business appraiser, and a wealth management professional.
Undertake the two exercises of obtaining a current COV from the business appraiser and a retirement needs analysis from the wealth manager.
Now One Clear Equation
Using the retirement needs analysis as your baseline, does the COV exceed your desired retirement needs?
If so, you have the green light, all other things being equal, to move forward with putting your business up for sale. (Now comes the part of finding a qualified, experienced mergers and acquisitions advisor, investment banker or business broker to handle the marketing and sale transaction of your business. Which type of professional depends on the size and complexity of your business).
If the COV does not exceed your desired retirement needs, hold off selling your business for now.
Selling My Business Now Is Not In The Cards
If selling now doesn’t look like the right move, spend your time on improving your business so that when you do an update of this analysis, and the light is green to sell, you are ready to go!
Exit Planning Services From Endorphin Advisors
Endorphin Advisors has an experienced team of advisors to help you through this process. We offer confidential, expert advice, counsel and project management services to business owners contemplating the sale and exit from privately held businesses.
Endorphin Advisors has a full workshop on preparing companies to be sold. Please contact us if you are interested in learning more or wish to schedule a workshop.
Please let us know if you have any questions.
Thank you for your continued interest and support.
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