Creating alignment will help grow your business valuation
A private business owner recently shared his frustration related to what he felt the company needed and how his view differed from that of his co-owner partners. He felt their focus on revenue growth was coming at the expense of profitability and was asking us how he might broach this with them.
We see this commonly with co-owners and although it may manifest itself in different ways, the root issue is the same. This root issue is lack of alignment specific to what good looks like long term for the business. It’s difficult to effectively discuss short/near term business focus and priorities if there isn’t alignment around what the end game is. If you have co-owner partners and you are frustrated by not seeing eye to eye on short/near term business matters, start by asking yourself, “do we see the long term the same in terms of how we each define what good looks like?”. Ask yourself and your partners questions like:
- What is each of us looking to get out of this business long term?
- Do we envision managing this as a lifestyle business or do we see one day trying to sell it to a third-party acquirer?
- Do we each have personal financial expectations and needs that we want to get from our company and what are these expectations specifically?
- Are our short and near term strategic decisions supporting our desired end game?
This conversation about defining the future can be difficult but it’s essential. You are less likely to build short term consensus if you’re lacking alignment related to the long term. This is not an issue to take lightly or to keep deferring. Talk with your advisors to get their insights or give us a call to help guide you. You don’t want the stress and frustration to grow and certainly don’t want to let time pass you by in building the company you’ve dreamed of. Drive for alignment with your co-owners and increase your likelihood of building great company worth.
