Reflections

When you sell your company one day, you’ll want to present a leadership team comfortable with strategy

Ask yourself this question – each day/week, when you talk with your key leaders, what percentage of these interactions are you telling them what to do (a monologue) versus you having effective strategic and tactical dialog to which they contribute good thinking?

The former builds a tactical muscle within your team, the latter builds a strategic muscle.

How do you go about getting others on your team to think strategically with you? It starts with you asking strategic questions. Employees are prepared to talk with you about what they know you like to talk about. If they know you like to tell them what to do, they will wait to listen. If you talk to them mostly about family, sports and weather, guess what they will be prepared to talk with you about?  If they know you like asking good strategic questions and dialoging strategically, guess what many of your managers will start to do?

Here are some good basic questions to start letting your team know that you are encouraging them to also think and talk strategically with you:

• Do we have any internal processes that we should re-evaluate for finding new efficiencies?
• What is one action each Department could take this year to find a new efficiency?
• What action could we take this year to increase our gross profit?
• In our market, are we viewed as a leader by our customers or as a follower of a competitor?
• Every industry has price setters and price followers, which are we?
• Every industry has product/service innovators and followers, which are we?
• What are the top 2 things customers would like us to do better?
• What are the top 2 great things we do for customers that they say sets us apart from the competition?
• Are the actions we have our team working on today helping us build company worth or are they just maintaining things?

These are the types of questions that you should have in your leadership toolbox and many more could be added. These are just a few conversation starters to let your team know you want to improve the strategic dialog being had amongst your team. Building a strategic thinking muscle at your business starts with the owner/CEO.  Ask your team more strategic questions and you’ll start to see who on your team can join you in also leading and participating in productive strategic dialog. Start building this muscle today and it will be a wonderful gift to your future self as you strive to achieve your euphoric exit event one day.

Studies show managers spend roughly 70% of their time in meetings – are they productive?

When you sell your company one day you want to present an impressive asset, your business, to potential acquirers. You invest a lot of money today in your people. You therefore have to ask yourself, what if I could improve the productivity of my people by just 5 or 10%? The impact would be significant to your bottom line and to your company worth.

A key part of your workforce is your supervisors and managers. Do you know how much time they are spending daily/weekly in meetings, are they at the 70% like other companies? Here are some great questions to sit with your leadership team to discuss….doing so could help you increase the productivity of your team:

• On average each week, how much time are our supervisors and managers spending in meetings? How many of these are standing meetings versus one off meetings?
• Of our standing meetings, how many have we refreshed the agenda for recently versus they have agendas that we set years ago and could be stale?
• Have we recently challenged the need for any meetings that we’ve been doing for a long time?
• Is our team good at effective meeting disciplines, meaning those calling the meetings identify meeting Purpose, develop good meeting Agendas, keep good notes and document Actions that we set?
• Is our team good at the follow up actions coming out of each meeting….or do we have meetings where we hash through similar discussions we’ve covered before because members of our team don’t deliver on their actions so topics are repetitive?
• For our standing meetings, if we polled participants, would they say they are continuing to get value from the meeting? Are the participants delivering value at the meetings or should the participants be reset?
• What time estimate would you make, in these various meetings that your team is having, that they are more forward looking versus reactive and fire fighting?
• How many meetings are we having where data is not leveraged and therefore the meetings are more emotion filled?

The questions could continue here but as an owner/CEO, these are the types of questions you want to be discussing with your leadership team. Many employees have never been trained or developed in conducting an effective meeting. Could your team benefit from such development? Everyone is challenged raising prices and you can only beat up your suppliers for better pricing so often but the one thing you can do today and regularly is identify how to make your team more productive. And in most businesses, the time suck is time spent in unproductive meetings. If these meetings on the whole are productive then your most likely building company worth, but if it’s not, you’re very likely holding back your company worth and in turn impeding your path to a euphoric exit event one day.

Owners and CEOs often time aren’t leveraging their monthly financial data effectively

Ask yourself this question – is our financial review of the business each month effective or is it stale?  If it has become stale, you’re missing an enormous opportunity to leverage your data to gain strategic insights and help you build company worth that will one day help you sell your company and achieve a euphoric outcome.

Here is what a stale/ineffective monthly financial review process looks like:

• Your controller or bookkeeper sends you the financials without adding any strategic insights from their perspective.
• Your monthly financial review pertains to the current month only compared to prior month or last year only and not compared to much else
• You aren’t seeing trend lines reflecting the past 3 years for your revenue, gross profit, SG&A and net profit
• You aren’t tracking your trailing 12, 24 or 36 months revenue and gross and net profit
• You aren't tracking actual performance to a well prepared budget - the budget was developed as more of a math exercise than a true strategic financial plan
• You aren’t updating a monthly forecast that projects the balance of the year
• You aren’t reviewing a forward rolling cash forecast
• You aren’t sitting with your leadership team each month and reviewing the graphs/charts related to the most recent performance of the business
• Your financial review of the prior month isn’t taking place until the 3^rd or 4^th week of the new month

Your financial data, if leveraged effectively, will help you and your team gain strategic insights about your business each month. These insights can help you in decision making and in driving improvements to your company. Talk with your leadership team about how effective your monthly financial reviews are for yourself and each of them….now is a good time to identify opportunities for improvement.

When looking to sell your company one day, show you have a plan for leveraging technologies, otherwise they will manage you

Here’s the bottom line on Artificial Intelligence….it could be a great tool for your company, but it’s just a means to an end. Focus first and foremost on your strategic end need and then go back and decide what technology will get you there.

Today, the companies making good progress leveraging AI tools are those that know what strategic improvements they want to make with their company and then determine where AI or other emerging technologies could enable them. But what you want to avoid is just assuming that AI is for you and start down a rabbit hole of time and investment only to ultimately reach an uncertain outcome for your business.

Here are some great questions to sit with your team to discuss first what your company strategic need or opportunity is:

• When we think about where our business is today and where we want it to be 3, 5, 7 or more years from now, what is the gap and what technology might help you close it?
• What is our business over-arching strategic need for this year – do we need more revenue, better fulfillment of the revenue we already get and/or do we need to deliver a better customer experience? Are you aligned as a team around what the strategic priority is amongst these three primary options?
  • What is our current selling model, our fulfillment model and our customer experience that we deliver and which would enable our productivity and growth the most by leveraging a technology?
• As we look at our company expense line items, what are the major ones that warrant a review for efficiency or productivity gains? Where might a technology help us become more efficient or productive?
• What are the various technologies we see emerging (slowly or rapidly) in our industry? (i.e.: additive manufacturing, robotics, AI, Augmented/Virtual Reality, Internet of Things, etc.)
• Where do we see our customers embracing new technology?
• Where do we see competitors leveraging new technology?
• Are there any areas of our company where we aren’t doing the basics well? (A technology may or may not fix a bad process, often times the process needs to be manually fixed before it can be moved to a technology based solution).

We encourage every business owner/CEO to have excellent internal and external situational awareness to know where evolving technologies can enable their company worth growth. But the key is to avoid first focusing on a technology, focus first on what your company strategic need or opportunity is. Then once this is clear, look to one or more technologies as simply a tool…they are a means to an end, not the end game by themselves.

One can build company worth, the other can put it on steroids for when you sell your company one day

You and your team work hard at trying to provide a solid customer experience for your customers and many businesses say it’s their customer service or support that separates them from their competition. But ask yourself this question – are we providing such a unique and compelling customer experience that makes our customers ambassadors of our company? There is a significant difference between having a customer and having an ambassador for your company. Which do you have?

So start thinking about what it will take to elevate your teams thinking and actions to create ambassadors, not just customers.  All your competitors have customers….but do they have ambassadors? What steps could your team take to elevate the customer experience to one that truly has your company standing apart from the competition. A customer may support your business but ambassadors will go well beyond this. They will support it and they will use their influence to bring others to your brand. When you have ambassadors, you geometrically expand your sales force because your ambassadors are also out helping to build your brand with their word of mouth.

Start the new year by discussing with your team what it would take to move your business from having customers to ambassadors. The ideas you come up with could help build your competitive moat, build company worth and help you in building an asset that a future acquirer will want to pay you a premium for.

Here is a great template for helping you prepare for your future company sale

You work hard. You invest time and money in your business and you most certainly have some sort of dream or desire as to what you want it all to add up to someday. Then why are so many owners and CEO’s of small to mid-sized businesses ultimately dissatisfied with where their business takes them. The answer is simple. They worked over the years only wearing their lens in regards to how they viewed their company. They didn’t wear the lens of a potential acquirer to understand what they’ll be looking for. So when exit day arrives, they only then learn what they should have done to earn a premium valuation in the eyes of the acquirer. Too often we see owners with a plan for growing revenue and profit, but not company worth. These owners learn too late that revenues and profits are only a subset of the overall company worth in the acquirer’s eyes. And we then hear they wish they could turn back time to have better prepared their business to excite an acquirer.

We recommend to owners/CEOs that they use time as a friend to prepare their most important asset in a way that would attract a future owner. Here is a great checklist (Company Worth Template here) to help you think through how close or far away you are from your desired future euphoric exit event. If close, great and congratulations keep up the great work. If you’re far away, send a gift to your future self by using this template to identify where the gaps are and beginning to chip away at closing them. Give us a call and we can help explain how to customize this template for your company.

When selling your company, prove your team has a continuous improvement mindset

There are two gifts that every owner/CEO can tap in to for improving profits and for growing long term company worth. The first is a solid pricing strategy.  The second, a productivity plan that drives a culture of continuous improvement.

What is a productivity plan? It’s your team identifying actions to take to produce more output with fewer inputs.  Ultimately, it becomes a pipeline of productivity enabling ideas, their prioritization for execution, the target value to the business, the person or team that will execute the idea and the steps needed for full execution.

Building such a plan begins by simply capturing productivity ideas. Brainstorm with your team to identify a list of possible ideas for driving efficiencies and this initial brainstorm will begin you on your way of having a pipeline.  Once you begin capturing the ideas, prioritizing them for execution will be the next natural step. In prioritizing, you’ll begin to estimate what the scope of potential financial benefit there could be for the company. Then, once a month your leadership team reviews progress being made with your productivity pipeline. Over time, you’ll be building a strong muscle and culture of continuous improvement that will benefit the financial performance of your company today and help impress a future acquirer or investor.

Here is a great template (Click here for Productivity template) for facilitating a productivity dialog with your team. Use this template to facilitate ideas and begin building your pipeline. Give your future self this gift of building and working a productivity plan.

Use a great template to assess whether your company worth increased

If one of your future exit strategies includes the option of selling to a third party, then today you want to be wearing an acquirer’s glasses and assessing whether you’re building the enterprise value, or company worth, that they will be evaluating.

Too often, executives confuse increasing their revenue and profit with increasing their company worth and this can be a critical mistake. What they don’t realize is revenue and profit are subsets of company worth.

Let’s look at two companies. Both serve in the same industry, both deliver $50M of revenue and $10M of EBITDA. Company A sells to a third party for $60M but Company B sells to a third party for $38M. How can this be possible given they are similar in terms of industry served and revenue and profit.

The difference is Company A focused on building company worth years prior to starting the sale process and Company B only focused over the years on revenue and profit. Company A has no customer concentration issues. Company B has a single customer that is 45% of annual revenue. The owner of Company A can take a 2-week vacation a few times a year and never have to check in with the office. Company B owner can’t take a meaningful vacation and if he does, he’s in daily contact with his office because his team needs him to help make decisions.  Company A has high predictability of their future revenues, Company B does not.

As you can see here, one owner had a plan for building company worth and one did not. Avoid being the owner of Company B. Attached (Company Worth Template here) is a helpful template for thinking about your company worth.

This template identifies the various potential company worth enablers in the eyes of a future potential acquirer. There are certainly others specific to some industries, but this list is an excellent starting point. The first column, “Company Worth Enablers” identifies what could be important to a future acquire. Do you know which ones will be important to them? As you identify these, place an “A” in the “Importance to Acquirer” column.

Then there is a column titled “Our Status”. This means your company and team’s status to impress an acquirer in this worth enabler. It’s Green if you’d impress them today, yellow if you wouldn’t but it won’t take much to get it to Green and it’s a Red if you won’t impress them today and you have much work to do to improve it. Then where it’s a “Yellow” or “Red” in your status column and it’s an “A” priority to a potential acquirer, then it becomes an “A” level priority for you to address in your strategic plan.

This template can help you facilitate great strategic thinking and dialog with key members of your team. Once you’ve identified what your future acquirer will place value on, you can use this template to help manage and monitor your progress to one day impress them. Did you make progress in the year now ending and where do you want to focus to make improvements in the new year ahead? And, if you’re wondering how to find out what is important to potential acquirers in your industry, give us a call and we can help you answer that important question.

Your strategic plan should address specific questions….here they are

When the day comes you want to sell your company, you’ll obviously want to be proud of what you’ve built. To get there, you’ll want a plan. That plan should answer several critical questions that should be on your radar screen today. Having them on your radar screen today will have you well on your way to a future euphoric exit event down the road.

So, what questions should a well thought through strategic plan address? Here is a template/check list (view template here) for you to have on hand. Sit with your team and discuss your current plan (whether it’s in your head or on paper) and determine which of these questions you have solid answers to and which you still need to work on.

Use time as a friend. Build a strategic plan that is truly valuable to you in helping to build the worth of your business.

Good strategic thinking will bring you this clarity

When the day comes that you want to sell your company, the acquirer will ask how they might continue to grow your business under their ownership. You will want to have a succinct and logical answer for them but you should also know this answer for yourself today.

Ask executives what their growth strategy is and too often they take several minutes to answer this straightforward question. It should not take several minutes to answer, it should take one word. They might then want to add specifics and details or background as to how they reached the one word conclusion, but if they’ve thought through their growth strategy well enough, one word will suffice.

The one word strategic growth summary is one of four options: Market. Product. Presence. Hit.

Any business, no matter the product or service they offer, has the following four growth strategy options. Which will have the greatest near and long-term impact on your company:

Market – expand to new market segments or entirely new markets. You take this step when you believe you’ve tapped your current sand box and need a new, larger box to sell your products or services to.

Product – expand your product or service offering. You take this step when your customers respect you and like doing business with you and will do more, if you offer them more.

Presence – expand the visibility your brand has in the market to your target customer. You take this step if you believe your growth is constrained by your target customer not knowing you exist or doesn’t understand all you have to offer.

Hit – enhance your hit rate, also called win rate. Improve your percentage of wins when your team tries to reel in a customer. You take this step when realize that your market size is attractive, your product and presence are solid but your hit/win rate needs to improve. Your team’s ability to close the work with customers, the timeliness and quality of your proposals going out the door, your team’s follow up, improving your sales messaging, etc, any of which could help grow your business.

That’s it. Just four ways that any company can grow. Which needs more focus at your company in order to drive profitable growth? Identifying which of these four your company should focus on could have you well on your way to growing your company worth.

The answer is a resounding, maybe

A company owner recently put his company up for sale. Interested parties arrived to kick the tires of the business and a particular company submitted a Letter of Intent that was accepted and due diligence began. Early on in the due diligence, the acquirer’s team identified issues with the seller’s customer multi-year contracts and not only did this slow down the deal, but it also caused the acquirer to reduce their offer after reading the documents.

Having multi-year contracts can very much help build your company worth because they represent visibility to future revenue. But, your company worth can be negatively impacted and your exit process negatively impacted if an acquirer throws a red flag over language your team has accepted in contracts. Here are just a few of the more common red flag items:

• Firm fixed pricing – if your long-term contract locks you in regarding your pricing or only allows for small escalators despite your business being exposed to potentially higher material or labor costs, this can reduce the benefit of having the contract. If you have to accept related language, at a minimum ensure you can raise prices to fully offset any cost increases you become faced with.
• Company Ownership Change of Control – avoid accepting language that requires you to first tell the other party you’re contracted with that you’re planning to sell your company and you have to tell them before you are allowed to talk to anyone else. The only language to accept would be that you have to notify them within a reasonable amount of time after the sale has been completed, not before.
• Right of First Refusal – this language says when you decide to sell, you can’t speak to any third parties about buying your business until you first tell the party you have the contract with because they have the first right to consider acquiring it. Only once they decide whether they want to acquire your company will you know what path to take. This language locks you in to only negotiating with them (leaving you no negotiating leverage because you don’t have the ability to have multiple parties fighting over your business) or they have to give you a formal release of this contract language which can take time to get. Any way this plays out, it can very much impact the valuation placed on your business and it can definitely slow down your exit process.
• Sharing of Intellectual Property – avoid language that has your IP being shared with third parties. This occurs sometimes when your part or your service is then used as part of the customer’s solution and they believe that by combining your product or service with theirs, this entitles them to lay claim to some of your IP. No acquirer will want to pay you a premium for your business when knowing that a third party also has declared rights to your IP.
• Limits of Liability – acquirer’s don’t like language that has your company having a future unlimited exposure if your product or service could be challenged in how it performed. If it’s deemed that your product or service contributed to a failure and a party comes to you for damages relief, you’ll want language that does put some limits on your exposure as unlimited exposure will definitely be cause for concern for the acquirer.

There are a few lessons to be learned here. First, the seller mentioned above should have engaged with a professional that does deals for a living. This would have led to a due diligence dress rehearsal prior to starting the exit process. It’s during this rehearsal that any issues with contracts would have been flagged and attempts could be made to remedy the issues prior to bringing the company to market or at a minimum, be able to position the matter with the acquirer versus them bringing it to your attention.

Next, there are 3 additional things to have in mind. First, ensure that whoever in your company is negotiating customer and vendor contracts knows to look for these clauses sometimes embedded deep within the pages of the document. Second, ensure that a contract attorney is involved at least on the larger impact agreements. Third, negotiate contracts wearing two sets of glasses. Wear your glasses so the language is good for you and your business today but also wear the glasses of a future acquirer as having that lens can help you avoid future headaches when trying to sell your business.

Avoid working hard these next few years only to find out that your deal to your euphoric outcome is impeded because of legal language you signed up for today. Meet with your team and discuss how you manage negotiating these contracts to ensure nothing will fall through the cracks.

When you sell your company one day, an acquirer will want to know what muscle you have

One of the muscles a future acquirer will assess your team for having pertains to building your near and long term operating budget. Is your budget built on a good strategic planning muscle or is your budget really just a math exercise for your finance team. Your budget should be the financial plan for your strategic plan.

Because this time of year many businesses are building their budget for 2026, here are some do’s and don’ts to have in mind:

Don’ts:

• Don’t do your planning and budgeting at the same time. When your team knows you’re trying to build a budget while developing a strategy, they will be constrained in their thinking.
• Don’t build your budget assuming what you spent this year is a good basis for what you will spend next year. A line by line P&L review of costs will be needed to pull out anomalies from this year that shouldn’t be assumed and added on to for the new year.
• Don’t build a budget that isn’t linked to your company strategy for the new year. Your budget should tell a story and that story should be where your team plans to invest in the year ahead and where you will look to improve.
• Don’t build a budget and then put it on the shelf. A budget is a living tool that monthly should facilitate strategic dialog around how the actual results compare – much can be learned strategically and tactically when you have a good monthly cadence.

Do’s:

• Identify what your strategic initiatives will be for the new year and what impact they will have on your budget – where will you invest in your business, where will we look to drive improvements that could be reflected in our financials (i.e.: cost saving or productivity improvement opportunities).
• Identify for yourself and your team what aspects of your business will get investment dollars in the new year and which may not unless actual results exceed budget. Your budget should help you see where every $1 of investment should go going and is that investment going to move your strategic plan forward.
• Identify the base assumptions that will underpin your budget. Base assumptions include; what cost of living changes we are planning for labor, raw materials cost changes, utility expenses for your location(s), vehicle expense (if you have a fleet), insurance expense assumptions, etc, etc.
• A budget should be a financial roadmap for each of your key functional department managers. Make sure they understand their role in supporting and working to the budget specific to their area of responsibility.
• A budget should help you see that you’re protecting and building upon your company core competence. A good strategic plan should identify what your company core competence is.
• Use your budget as a learning tool. The best organizations are learning organizations. A budget is an opportunity to identify each month where your planning was good in what you expected your financial results to be and where your planning was off and how you can learn to avoid the same “off” again in the future.
• Don’t build a culture that has the budget being owned by your finance team. Yes, they are the ones to build the spreadsheets and report the results but the budget is owned by the leadership team.

Budgets are powerful tools to help guide and track your company progress. Building a good budgeting muscle today will reward you in many ways, including checking an important box for a future acquirer that wants to see that your company possesses such a muscle. Budgets aren’t math exercises, they are powerful financial planning tools so use time as a friend in leveraging this enabling tool at your company.

A future acquirer will ask, let's make sure you know the answer

When you go to sell your business one day, there will of course be a litany of questions asked by the potential acquirer(s). One such question could be what is your CAC, or Customer Acquisition Cost.

Let’s start with why they want to know this. It’s simply to help them understand the business today and how it might scale. If your company has built a model of finding and drawing in customers at what is considered a low acquisition cost, this bodes well for the valuation they might place on your business. If they believe the CAC is higher than they’d expect, this will have them probing further during their due diligence to understand more of the why and what steps they believe they could take to improve this if they owned the business.

Your CAC is simply your Total Sales and Marketing Expenses divided by Number of New Customers acquired. Let’s say your sales and marketing expense in the month was $100,000 and you brought in 10 new paying customers, then your CAC is $10,000 each. Whether this number is high or low will depend on several factors including your particular industry.

Sit with your sales and marketing team, include your CFO or controller and discuss this strategic metric for your business. Determining what your CAC is today and how it benchmarks within your industry can help facilitate very healthy strategic thinking and dialog. Don’t wait until you’re asked the question by a future acquirer, help your business today by knowing now.

Whether you’re planning to sell your company one day or not, these questions should be addressed

A common question we get from owners and CEO’s is what questions should their company strategy address? Strategic thinking and planning will conjure up many questions and that’s healthy. But for many this is what can cause strategic planning to become so daunting. And when things become daunting, we tend not to want to address them and allow ourselves to be distracted by more tactical matters.

We share that at the end of the day, here are the most critical questions your company strategy should answer for you:

• What are the worth drivers that a future investor or acquirer will look for if considering investing in or acquiring my company?
• What is my company core competence that I need to protect and invest in?
• What is my company worth today, what do I want it to be at a future date and how big is this gap?
  • If there is a gap that I want to close, what is causing it?
  • What actions would I need to take to address any gap?
• Within the industry landscape that we serve, where is our company optimally positioned to build long term company worth?
• How should we evolve our product/service portfolio to be unique in serving target customers?
• What financial need does my business have and how will I finance my plan?
• What organization do we need to deliver on our plan – what talent, experience and structure is optimal for today but also to help us close any gaps we see?

Your company strategy, either in your head or on paper, will help answer many questions that guide you and your team in evolving your company to an even better place. But it’s easy to get lost in many, many tactical questions that can detract your energy and thinking from the broader level questions that need to be answered first. Answering the more strategic questions first will in fact make many of the tactical questions easier to answer.

Your company worth is driven by your organization culture, focus on it

When selling your business one day, you’ll want to present an organization that excites the acquirer. You’ll want them to see that they can assimilate all or some aspects of your team and culture into theirs and in so doing, it will strengthen their business. Use time as a friend to build such an organization.

Your company today and in the future will be the intersection of two things. First, how good your team is at coming up with ideas and plans for enabling your business growth. Second, how good your team is at implementing those ideas. Where these two intersect says a lot about your culture. What we find most often in working with company owners and CEOs is that their culture is frustrating them.

There are five primary reasons that we find owners and CEOs are frustrated with their organization culture.  Here are the reasons:

• Leadership isn’t articulating the ideas or plans clearly enough. Ideas for growth or improvement are being communicated to some or all team members but not in a way that they truly understand or embrace. This frustrates leadership because ideas don’t get well executed and it frustrates employees because they hear ideas but execution steps are confusing.
  • Improvement step: next time an idea or plan is articulated, ask the employee(s) to play back what they just heard and allow them an opportunity to ask clarifying questions.
• The ideas or plans aren’t being linked to an articulation of a deliverable or what good looks like once the idea or plan is implemented. The idea or plan might be clearly articulated but if it doesn’t include a target or a description of what good looks like when it’s implemented, this will lead to confusion and frustration because how you view a successful outcome and how they do might differ. It can also lead to scope creep which is a great source of frustration for all.
  • Improvement step: With the next idea or plan that is communicated, specifically address how it will be measured for successful completion and allow people to ask clarifying questions.
• There may be a set deliverable for the idea or plan but employees don’t understand how the deliverable will be measured and/or don’t agree with the measurement. Strong leaders ensure that their team understands the deliverable and has a chance to discuss it to uncover if there are issues keeping them from embracing it.
  • Improvement step: consider where you have employees with ownership or involvement in driving to a deliverable or a KPI. Ask them if they understand the calculation and if they believe the calculation is effectively capturing the result.
• Companies allowing there to be inconsistent accountability around the company for people’s performance. This will be a great source of cultural frustration. Some employees will feel they are held to a different performance standard and that under performers are not addressed. This will lead to your star performers max’ing out what they give you because they see you accepting under performers. Address the under performers and you’ll be surprised to see your star performers raising their bar further for you.
  • Improvement step: ask yourself, do me and my key managers define performance and accountability the same? Do we have some managers holding their teams to one standard of performance and other managers adopting a different standard?
• Lastly, leadership is the only one coming up with ideas and plans so this frustrates both leadership and the employees. Leadership wonders why ideas don’t flow upward and employees wonder why ideas only flow downward.
  • Improvement step: ask yourself, do I or do my key leaders encourage all team members to come forth with ideas for improvement and growth so that employees know we want to regularly hear their ideas or do we make this uncomfortable for them? What can we start doing to convey to all employees their ideas do have merit and we will have a process for considering them?

Our job as owners and CEOs is to build and protect our organization culture. Do an honest assessment in considering these causes of frustration. Investing in your culture today will pay you great dividends both in how your team performs today but how it can also enable your future euphoric exit event.

Asking insightful, strategic questions could help you build company worth

As we are now in Q4, let’s pick our heads up from the tactical side of our businesses and think about our future euphoric company exit event. To get there, good leaders ask good questions – they want to facilitate strategic level dialog with key members of their team because they know that any threat or opportunity their company faces, won’t generally be seen or addressed by only having tactical level dialog.

Here are a few good strategic questions to be thinking about with your leadership team in Q4:

• What’s our forecast for our 2025 revenue and profit and when looked at over our prior 5 year historical performance, are we showing a consistent upward trend of both? If not, why not?
• Are we making progress this year in building company worth?
  • Addressing any customer or vendor concentration challenges?
  • Building our customer stickiness?
  • Enhancing our sales model to build a more predictable future revenue stream?
  • Innovating product, service or capability that makes us unique in the market?
  • Strengthening our team and/or company culture?
  • Driving operational improvements to increase productivity and efficiencies?
  • Building our brand equity with attractive customer segments?
• In preparation for the new year, what logic will underpin our revenue and profit targets?
  • What’s our forecasted backlog that we will begin the new year with?
  • Will we lose any contracts or customers that we need to factor in?
  • Are we targeting specific markets or customers to drive growth?
  • Will we be developing sales plans for our top customers (or top customer segments)?
  • Are we planning our growth from existing customers or new ones?
  • Are we planning our growth from existing products/services or new ones?
  • What is our pricing strategy for the new year and what yield will impact our financials?
• In preparation for the new year, what strategic focus should we have in the year ahead?
  • What operational improvements do we want to make? Can we become more efficient?
  • How might new technologies impact us positively or negatively?
  • What organizational structure and/or culture improvements do we want to make?
  • What improvements do we want to make to systems or processes to support growth?
  • What improvements do we want to make to our sales and marketing model? To our pricing model?
• What dynamics presented themselves in 2025 that could either lead to our company being disrupted by a competitor or that could enable us to be a disrupter of others?

The list could go on here but you get the gist. Strategic leaders constantly are thinking strategically with their team. And yes, then bridging that strategic thinking to action. But for too many, their comfort level is the daily tactical focus and too little on the strategic questions and discussions that will have the most positive impact on building company worth. Use this beginning of Q4 as yet another opportunity for building the strategic thinking muscle at your business and leverage these questions to facilitate a healthy team dialog.

Address this question to better position your company for a euphoric future exit

Steve Jobs was once asked what he was most proud of doing at Apple. His answer was simply, “I’m most proud of what we didn’t do.”

It’s easy to do things simply because they’ve always been done. A company can fall into an operating comfort zone. But in order to have resources directed toward new company worth creating activities, your team might have to stop doing certain things either temporarily or even permanently. Every company has limited resources so it’s a leaders’ job to determine how best to deploy and even redeploy the resources – are your resources being deployed optimally?

Here are some questions to discuss with your leadership team:

• Do we have any processes today that we designed years ago and perhaps are no longer optimally designed or performed? If we redesigned the process today, would we do it the same way?
  • Do we monitor our business costs by major categories to help determine priorities for continuous improvement opportunities?
• Are we investing labor time or investments into an area where we lack key performance metrics to monitor the effective deployment of these resources? In other words, where we spend lots of money, are we effective at monitoring the value what we are deriving from the investments?
• For projects we are currently working on, how are we monitoring whether they are making progress versus letting them linger and draining our resources?
• For development of new products or services, do we have an effective process for putting these projects through stage gates to have Go/No Go decision points along the development process to avoid some products/services from consuming too many resources before determining they don’t further warrant receiving this investment of time, labor and focus?

Don’t assume that your labor, investments and focus are being deployed optimally. Regularly discuss with your leadership team if resources should be redeployed toward activities that will help you grow your company worth. Excite your future acquirer by building a business that is just as good at stopping to do things as it is at doing them.

Identifying your market landscape can grow company worth

When you look to sell your company one day, a potential acquirer will want to know where your company fits within the industry in which you serve.  Knowing where you fit within your industry landscape will help you in knowing where to place your bets, or investments, for the future.

Company owners and CEO’s in every industry have to place bets. Think about the time when owners had to place bets on the horse and buggy or the automobile. Today, making bets on whether gas, electric, hydrogen or some other fuel will power our cars and planes in the years ahead. Or will the cell phone be the mobile device that consumers will use or will it get replaced over time with AI display glasses that some believe will beat out the cell phone device. So ask yourself, what bets am I already making about my industry and what bets should I start thinking about having to make to not only protect my business but also to enable it versus my competition.

To know where to place your bets, you’ll want to develop a market landscape. In a market landscape, you’ll be identifying things such as;

• Where is my company positioned today versus key competitors? Think about positioning related to price, quality, availability and value.
• In this world of Good, Better and Best offerings, where is my company positioned? Where do we think we should be positioned tomorrow? Serve one of these markets, two or all three?
• Where does my company fit in the value chain that customers derive from working with our product or service? In other words, where does your customer derive value in using your product or service and which parts of the value they derive is your company fair at, good at or great at?
• Where the customer sees value today in the product or service you provide, do you anticipate this might change in the future as their needs or even new technologies become available?
• How do you think your industry market landscape might currently be changing? How might it change in the next decade? How would these potential changes impact your company and what bets do you have to make?

Don’t place the bets on your company blindly. Conduct a market landscape assessment for your company to see where you fit today and to start generating ideas on where you might want to evolve your positioning for the future. Avoid having market forces change your company as this will have you playing defense. Be on the offense so you maintain control of a positive future outcome for your business. Call us (949.874.0787) as we can guide you in how to develop your market landscape and help you accelerate the growth of your company worth.

Auditing prior decisions can create new pathways to company worth

When the day comes you want to sell your company, your goal will be to maximize the value that a third party is willing to pay you. But getting a third party to buy your business and do so at a premium valuation doesn’t happen by chance. Have a plan and as part of that plan, build a learning organization.

A learning organization is one that identifies key decisions that its leadership team makes and periodically selects some of them to audit to identify the learnings. The learnings related to what was done well in making this decision, what was missed and what learnings can be gained to apply to the next time this type of decision arises.

Sit with your leadership team and discuss how to begin building this learning organization. Select a recent decision your team made (a decision to invest in a new system or piece of equipment, to open a new location, to launch a new product/service, to open a new customer, to hire for a key position) and ask these types of questions:

• Was this decision a one off or will we periodically face this again? If we will face it again, did we capture the learnings from this recent decision we made?
• In making the decision, what did we do well and should capture the learnings to apply to the next one?
• Where were we challenged in making this decision and could we minimize or avoid this challenge the next time?
• In retrospect, what did we not do well in making this decision and need to capture the learnings to apply to the next one?
• Did we include the right people in making the decision?
• Did we gather the right data to help us make a fact based decision?
• Did the decision align with our company mission, vision and values?
• Did we make the decision in a timely manner or are there steps we could have taken to be more efficient?

Unless you are periodically stepping back and evaluating key decisions that your company has made, there is a chance you’re missing a great opportunity for strengthening your culture. Learning organizations grow company worth at a faster rate and to higher levels than others. Ensure you’re on track to a future euphoric exit event and building a learning organization is a giant step in that direction.

When selling one day, the difference can put your company worth on steroids

Each company has two options for evolving their product or service offering.  The first is to react to a need that the customer has conveyed they have or that we’ve identified they have. The second is to know your market and customer well enough that you can put yourself in their shoes and anticipate a need or want, one they haven’t even recognized yet.

In going the reactive route, you’re playing the game as your competitors do and you’re working hard at trying to be the best. In going the anticipate route, you are working equally hard but this time you are looking to be the only.

So ask yourself. Is my team focused on delivering only what the customer knows they want or need or do we expend equal calories looking for ways we can anticipate a need? Are we looking for ways to do what our competition does but be better or are we expending equal energy looking to be the only? A business good at reacting to customer needs may command a good exit valuation but one that has a track record of also being able to anticipate customer needs and be the only one meeting them, that company valuation will be put on steroids.