I have been working with family run businesses for quite a few years now and found that there is a pattern developing in why I see businesses fail to sell. I believe that the KISS (keep it simple stupid) theory to analysis gets the point across to the impatient and overly stressed entrepreneurs, so let me explain. The main reason that I see businesses fail to sell usually falls into one of the categories of the bible’s 7 Deadly Sins.
Whether you are a Christian or not the bible does have some great advice to live by. The 10 commandments are the backbone to our Country and judiciary system here in the United States and there is some good advice there to consider. Another great list of rules to consider is the 7 Deadly Sins – Sloth, Anger, Envy, Pride, Gluttony, Greed and Lust.
I want to take one at a time here so we are starting with Sloth. This is generally referred to when someone fails to utilize one’s talents and gifts. The modern view goes further, defining it as laziness and indifference.
I see this in business owners in a couple of ways. First, entrepreneurs are very controlling and micro-managing. Please don’t be offended here because I am one too and I know this because I have been called to the table by more than one of my managers. It is true that we think we “need” to be that way but in reality this is more of a control thing than a business need.
This management style might work great for day to day operations but when it comes to selling your business the more involved the owner is to the day to day operations then the lower the value of the business becomes. Rarely, actually I will go out and say never, have I seen any owner have all the talents and gifts required to take a company from a small couple hundred thousand dollar a year revenue company to a multi-million dollar operation by themselves.
We all have our talents and strengths. Some business owners are sellers (they can sell ice in a snow storm) and love to be out networking and generating leads. That is where their passion is and where they get their energy. Others owners hate selling and would rather spend all their time making their product better and better. They assume that if you have a great product then it will sell itself. There are still other owners who think that finance is the main driver and they spend most of their time in the books and make all decisions based upon the numbers.
The point here is that to sell your business all entrepreneurs need to know their strengths and weaknesses. They need to hire people smarter than themselves and motivate them to excel. They need to put into process rewards for the over-achievers and allow the employee to be empowered to take the business to the next level. Once they do that then they should be rewarded by more than a “you have a job so be happy”.
If you are a business owner then look at Sloth this way. Consider yourself building a baseball team where there are multiple positions and skills to make it to the World Series. You need to be the coach, not the player, who is always looking on how to improve each player. Teach them how to succeed and make the substitutions when required. Do not be the player because the more the team’s success is dependent upon your playing skills the less it is worth.
Try to let go control and concentrate on your talents and gifts. You are an entrepreneur so the internal optimism and drive is there. Let that be the fire to empower your employees to their strengths and give them the tools to run the company without you. I promise, if you can do just that one thing, the chance of success in selling your business has just gone up dramatically.