I’m always curious to know why Business Owners quite freely jump to the suggestion of bringing in an equity partner when thinking of growth. Especially if they claim they have funds to add to the pot! Whereas the option of Growth by Acquisition rarely gets a look in.
I’m not suggesting for one minute that it’s not an option, not at all. But it is often flippantly thrown about as one of a number, almost without real considered thought behind it.
Knowing someone, whether it be for a long time or short, does not mean you know what they will be like as a business partner. Let’s not mention all the decisions you’ve always made will no longer be all yours to make. Plus there’s the issues about how to spend money, what to do with profits, what staff to bring on, what role each of you are to play, etc…
The way I structured this decision, way back in the heady days of aCE talentNET was to have my prospective business partner work as a sub-contractor for 12 months. If a relationship is going to work, or not, doubts will have raised their head by the conclusion of that time frame, enabling both of you to shake hands and walk away, before any real damage is done.
I wish we had followed the same protocol when bringing on partner #3 but that’s another story. Warning: don’t always let reputation get in the way of adhering to your process.
Having had one way work and the other be a disaster, I know which I will repeat again in future. Something I strongly urge all Business Owners to really think through when broaching the same topic in considering growth options.
Think about it from an Exit Strategy point of view. How much easier is it to at least get to the sale decision when there’s only you. The more people you add to the decision making process, the more delay fatigue will potentially set in.
Growth by Acquisition on the other hand means you may be able to negotiate to have the best of both worlds ie the additional revenues and client list, without necessarily taking on the exiting partners… think about it…
Today I spent time in a meeting that I had arranged but was being led by another party. The reason for the meeting was to help the Business Owners “get clear”…
“Get Clear”about what? About their options, as opposed to pinging around from one option to another in the hope that one sticks!
This is what happens when you don’t know who to talk to, nor do you know how to find the right person. Mind you, it happens to all of us when we are moving into new territory!
When it’s a big ticket item like hanging on to 100% of your business that is on the cusp of greatness, where capital raising is required, there’s nothing more disheartening than to find you not only don’t meet bank criteria and the accountant offers you details on your situation but is not able to direct you much further, unless you’ve got family and friends with deep pockets, what do you do?
Fortunately I was in a position to assist these particular clients, hence the meeting today. The beauty about the meeting today was having a learned colleague who could ask all the right questions and have a pretty clear idea on how to assist.
It went so well that a proposal is under construction… Fingers crossed it all works out so they can win the “first prize” they’re after!
Talk about going from one extreme to the other!
Yesterday, as smooth as clockwork.
Actually that’s not strictly true, it depends on what I’m comparing it to.
If using my diary and to do list (as I did yesterday), today’s activities were not even remotely close to doing what I was supposed to have done. If on the other hand, I review the activities in terms of upping the ante on playing a bigger game then I was right on the money…
Today I had two phone calls that were not planned but have the potential to be enormous…
Both took time to work out what was being asked, both took time to nurture and both could go absolutely nowhere!
Using the old “Tattslotto” motto – “you’ve got to be in it, to win it“, this goes for business opportunities as well. Yes, you do have to be savvy enough to recognise not all presented are in fact what you should be pursuing. Nonetheless, the initial conversations can be rather interesting, as well as time-consuming, so you do have to be careful.
As I’ve been known to say, being opportunistic and bold is the only way to really get ahead.
Sometimes doing the stuff you’re invited to do has to take precedent over doing the stuff you need to do; don’t you think?
What sphincter-tightening moment did you have today?
When I started work with a Client today, we were going down a particular path, one we had been on for weeks… and then it changed.
We continued to explore one line of thinking and it became obvious that those around the table were not really comfortable with where we were going. So with all bets off, we re-explored what we were doing.
Only to come to the conclusion that we wanted to take a different road, one that seemed much more “right”!
We will all sleep on it tonight and see what verdict we wake with again tomorrow… although my guess is that the new path will be pursued from now on.
Yet another example of it never being to late to start again…