Easy should be the last thing you do

I just listed a house for sale, something we have done many times over the course of my career before we finally “arrived” back in the north country; so this is not a new experience. And yet, despite that fact, I find that we tend to forget what we should have learned to do long ago. Our Realtor, a trusted advisor, offered a few suggestions: repair this, replace that, address some clutter: things that we have seen day-in and day-out until we did not even realize they were there. In this instance, we took her advice. Better that than take a risk and miss an offer.

Funny thing: once the suggestions were addressed, we are enjoying the house a little bit more. And we hope the house will be even more attractive to potential buyers. There were times that we did more — a lot more — to a property on the eve of being transferred, like landscaping or painting the house. We called it “fixing it up for the next guy.” And we seldom got to enjoy the improvements since we were definitely moving.

The human condition being what it is, these lessons can apply to so many other facets of life. As a business owner, you likely experience certain things so often that you don’t even realize they exist. And have you ever had a trusted advisor suggest some changes that you know are right on target and not act on them? Why is that? Sadly, in the course of operating a business day-to-day, it is all too easy to focus on what is familiar, easy and for today than it is to embrace what is unfamiliar and hard but important for tomorrow. It’s the focus on tomorrow that will build value, make your life more rewarding and take risks out of your business.

Some examples:

EASY: Make all the important, and maybe not so important, decisions yourself. HARD: Build a strong, capable management team that can operate smoothly without you. Maybe you could actually take a few days off without the place imploding. If the plan is for your business to die with you, then maybe this isn’t important. If you want your business to survive you, or you plan to sell it, this must be a priority.

EASY: Base your relationship with your partner on a handshake. You’ve known her for a long time. What could go wrong? HARD: Develop a formal, written buy-sell agreement describing the terms to buy the other out in the event of a departure, death, disability, disagreement, divorce, etc. Fund it with insurance. Otherwise, get ready for your next, maybe unknown, partner.

EASY: Focus your sales to just a few customers and on a few good products. Oh, and just sell within a 50-mile radius. HARD: Cultivate many customers, offer a full line of products over a broad area with no reliance on any single one.

EASY: Check the cash account every day to see how much is there, whether you can make payroll and then choose which bills to pay. HARD: Know how much cash you have and forecast what will be needed and when.

EASY: Live with unknowns. If you ignore them, they will go away. HARD: Have confidence that you know all the risks in your business.

EASY: Hope the business survives as long as you need it to. And that you can sell it for enough to retire like you want. HARD: Have a current calculation of value for the business and know how much more valuable your business could be if risks were managed.

EASY: Look in the mirror for all the answers. After all, you’re a handsome lad; who else could know better? HARD: Assemble a team of trusted advisors who can provide a fresh assessment of your business.

And the list goes on …

If you do just one of these, I guarantee you will sleep better. The more you do, the better your business will perform. You’ll enjoy it more and the hard will become easy.

Risks exist in every business. Risks impair value. Knowing and managing risks increase profits and business value, for you and the next guy who buys it.

As for the house, we’re just selling, not moving. So the next time you’re in Clayton, give me a call. That’s not so hard.

Paul Luck is a principal partner in The Succession Partners, Clayton. Contact him at (315) 778-5257 or PaulLuck@thesuccessionpartners.com.