Key Ingredient to Business Success

by Don Harkey

I had lunch with the owner of a business brokerage firm yesterday. For those of you who don't know, a business broker helps people buy and sell businesses. This puts them in a unique front-row position to watch businesses undergo leadership change. Good brokers spend a lot of time analyzing the business they are helping to sell, so they have a lot of information on the current state of the business as well as information on the old and new leadership.

This particular brokerage recognized their unique perspective and conducted a study of businesses they had sold going back 5 years. They were looking at the ones that were successful and the ones that had failed and tried to find the factors that lead to success. They expected to learn that cash flow or maybe location had a strong influence on the future success of a business. They simply failed to find any significant correlation.

Refusing to believe that business success was random, they decided to go through their list of companies and gather the general impressions of the brokers that worked with the new owners. This was a much less scientific approach, but the results were interesting. The general impression was that the successful business owners were more passionate about what they do.

Consider the implications of this... a business located in the right place with strong cash flow with an owner who is less than engaged is more likely to fail than a business in the wrong place with poor cash flow and an owner who is on fire about making the business succeed.

Passion truly is productive!!

Strategic Planning: It's the Journey

by Don Harkey

I have heard a lot about Strategic Planning lately. Organizations who have struggled in the recent economy are realizing that they could have been better prepared. Unfortunately, many companies who thought they had a plan, found out that the plan didn't apply to rapidly changing conditions. I recently reviewed a plan from a professional firm that had been filed away shortly after it was created. The owner of the plan simply said that the situation had changed from when they created the plan. When would this not be true? Does this mean strategic plans are worthless? No...

When you want to develop a strategic plan, the steps are pretty universal. You look where you are, where you want to be, and then decide how you will get there. If you stop here, this is where your plan will become out of date before it is even completed. The most important step of strategic planning is to develop an understanding of who you are.

Last week, I took a Guerrilla Marketing seminar from Brett Curry (Curry Marketing). Brett talked about marketing strategy and the first thing he said was to develop a marketing message. You need to know who you are before you can go forward.

Imagine that you are standing in the forest with a trail in front of you. You are trying to get back to your camp. You develop a plan to get there. As you go on your journey, you find that your original path is overgrown with thickets. Are you going to cut through the thickets, find another path, or go back to the beginning and start over. Your decision might be based on the distance to be traveled, how much food and water you have, the temperature outside, how much energy you have... You need to have a clear understanding of the situation in order to make a good decision. If it is getting close to dark and you don't have a flashlight, it might be a good idea to punch through the thickets and accept the scratches that come with it. If you have lots of time, you might backtrack a little and find a new path.

The point here is that strategic planning is not about planning the path from where you are to where you want to be. It is about establishing the knowledge you need to make decisions while on your journey. There is no way that you can know what the future will hold, but you certainly can gain some clarity into who you are and what your values hold so that you can make decisions based on your strengths and abilities rather than on the heat of the moment.

Good strategic planning should apply to any situation, because it is a statement of your values rather than a concrete plan. It takes the foreseeable future and tests your values against it. It honestly evaluates your position and gives you insight into what you need to do to prepare for an uncertain future. It gives you clarity!