- 17 January 2023
- Michael McGrath
Thinking is the hardest work a man can do, which is why so few men do it. –Henry Ford
Five thoughts to stimulate your thinking going into 2023
Starting, running, and growing any business can require a massive mental physical and financial commitment. So-to for any leader seeking to push themselves. Many new skills must be developed outside our core area of competence; with mistakes along the way being part of the process.
As we contemplate a new year, we wanted to share with you some of the more practical reoccurring themes that Oasis has encountered while completing over 500 business sales. While I would hope that most of these you have already heard about in one form or another, I am reminded that repetition is the mother of skill.
These are intended to help you think rather than create more ‘things to do’.
1. The tendency to catastrophise! And the brown envelope.
We’ve all done it, in fact we are genetically wired to do it, which is how we have survived as a species. However, in 2023 we now replace the Woolly Mammoth with other worst-case scenarios.
So, try this, when you get up in the morning think what is the worst piece of news that could be in an envelope on your desk when you get to work. Then think through how you and your colleagues can plan to avoid it happening. It may be the loss of a major customer or supplier or a production breakdown etc. Planning will have the twin benefit of reducing the chance of it happening and minimising its impact if it does.
It wasn’t raining when Noah built the Ark.
2. The past is no guide to the future.
Figuring what’s going to happen next is difficult. Still, that doesn’t stop the endless spouting by the so-called experts. There is no shortage of stock market gurus telling us what’s happened (thanks for that) and many more also insisting they know what’s going to happen next! Yet, predicting the future is akin to watching a drunk in the middle of a field and guessing in which direction he will take his next step. At the same time the need to look forward is the job of business owners and leaders, especially at the beginning of a new year.
The truth is we make our plans using logic and the best information we have on hand. Then work diligently to execute those plans accepting that much of the future remains outside of our control. Good management make plans but holds them loosely.
Never let yesterday use up too much of today – Will Rogers
3. Make yourself redundant!
We still see too many owners front and centre of everything going on in their companies. This not only makes unlocking value difficult but can make owners feel that rather than owning a company they have a highly stressful and sometimes poorly paid job!
Successful businesses are run by people who are not only good at their own jobs but also can work as a team and effectively delegate. Unfortunately, some owners continue to make all decisions as they do not believe that others would take the right options. This often results in the best managers leaving in frustration and those that remain having titles and remuneration packages that assume they are responsible for major decisions when in fact they have become overpaid clerks/supervisors. Spend time finding and developing those that will push you and then allow them enough rope to make decisions for which they are accountable.
Those with torches hand them on – Plato
4. Focus
Diversification sounds good and often looks good on the drawing board but rarely is it the answer when the core business is struggling. There are often several areas in which a business can grow – maybe geographically, extension to the product/service range, new legs to be added to the business etc. These should be analysed, and concentration should be placed on the strategy believed most likely to be successful with a timeline and achievement goals set. Many organisations try to expand in too many directions at the same time with the dilution in resources and efforts leading to an overall lack of success. We still see too many companies with a division which has no tangible association with the core business and poses a real challenge when trying to unlock value.
Diamonds are lumps of coal that stuck to their job.
5. Where is the value?
In the current economic climate, it is particularly important that owners ask themselves the basic question – why do people buy our product or service? Is it price, technical spec, quality, speed of production, comprehensive range, stock availability, geographic location etc. Then you need to be quite clear about what value you add to the process and ensure that you are justifying an acceptable margin in sales to each customer. Now is the time to weed out those customers who have low volumes, constant special requests but insist on the cheapest price. With many businesses facing uncertainty and potentially seeking to trim staffing and overheads in 2023, this could be the ideal time to reset in terms of customer relationships and trading terms.
It is not the price that matters but what you get for that price.
To end with our own philosophy here at Oasis, when it comes to achieving success, we always quote US President Calvin Coolidge –
Nothing in this world can take the place of persistence. Talent will not, nothing is more common than unsuccessful men with talent. Genius will not. Unrewarded genius is almost a proverb. Education will not – the world is full of educated derelicts. Persistence and determination alone are omnipotent. The slogan ‘press on’ has solved and will always solve the problems of the human race.
Good luck and stay safe this year.