Accelerating Towards your Exit Strategy
At ValueMaker we obsess about what it takes to grow a business successfully. Why some SME’s can increase their business value effortlessly and why others, which seem equally well set up, have difficulty. We notice that the most successful SME’s relentlessly close the gap between what they intend to do and what they actually do.
This may not seem like a very revealing insight or one that can be a foundation of rapid business growth, but in our experience this explains differences in performance more precisely than any other measure. And it is a measure many SME’s are unaware of.
All SME’s that are planning to realise capital via an exit are on a journey from small to larger - and that journey is one of mind-set more than anything else. The journey can be made difficult as the motivation that leads an entrepreneur to set up his or her own business may conflict with the development of a large-business mind-set. Freedom and control, being in charge of your own destiny, are often more powerful motivators than the desire to be rich, yet for many entrepreneurs the aim of scaling the business to the point where it has realisable value is at least part of the dream.
Doing this involves the willingness to forgo some aspects of freedom and control. It involves working in a disciplined, planned way (closing the gap between intention and execution) and allowing others in the business to make decisions and initiate actions. (We would never advocate switching completely to a large-business way of operating – just recognising there are some key strengths that are characteristic of big-company thinking).
Many of the businesses we talk to believe they are doing just this. However, too often what we find is businesses where the leaders are involved in every aspect of business delivery, have no confidence in the ability of the business to deliver the everyday without their active intervention and are therefore committing too little time to the issues of accelerating growth and profitability.
The big strategies that could deliver transformation remain just that, strategies, while the leadership team run the day-to-day.
The good news is that it’s possible to change. The bad news is that the necessary changes may not be obvious, desirable or even, at first glance, that important.