Business growth can be a scary proposition…obviously it’s better than business failure, but there are a whole set of fears centered around business growth and success that plague a lot of business owners.

When your business starts succeeding beyond where you’ve been for a while, you leave your comfort zone…you head into new territory (which is scary).  Maybe it’s a situation you haven’t faced before (also scary).  Maybe it will require you to do some things you haven’t had to do before…hire more people, find a new location, spend more money (on people, stuff, rent, etc.).  And maybe it will force you, as the business owner, to do things differently…not do as much hands on work and to do more strategic leadership and planning.

All of that can be scary stuff – but I would propose there’s a better way to look at it.

I had a great conversation with a client last week who’s facing some great opportunities, including bringing on a significant new client that could be a 50% jump in revenue if it all played out.  It’s  all exciting stuff, but there was a real undercurrent of fear and tension as we talked about the need to bring on some additional help.

It boiled down to “How can I possibly afford to bring on that many people?”.

It’s a fair question, but it’s the wrong way to look at things because it will shut you down before you even get started.  It sounds silly (especially if it’s not you in the hot seat), but changing your mindset…changing your perspective can make a huge difference, even though none of the underlying facts change.

What if you look at all of the things associated with growth as investment opportunities that have a tangible return on investment as opposed to a cost of doing business?

As an example, the exercise that helped my client turned out to be some simple calculations of how many billable hours her clients would likely need in the next 6 to 12 months that would go to the new company resources.  To keep the math easy, let’s say it’s a 1000 hours of new work and the margin on each hour of work could be $20 to $40 an hour (depending on who and what they were doing).

Just using quick math and these assumptions – her margin on these new resources is going to be $20,000 to $40,000 each just in the next year, on the low end!…and almost all of that goes straight to the bottom line without hardly any extra time spent by the business owner.

That’s the beautiful leverage of a successful business.

Clearly there are a lot of things to take care of and watch out for.  You have to find the right people, you have to manage the relationships and the overall level of work, you have to have a clear idea of what’s next and how you can continually improve your business.  But you ought to be doing all of those things anyway – that’s your job as the business owner. 

So the next time you have a chance for growth…make sure you’re approaching it with an investment mindset and not getting wrapped up in the costs and challenges.

Have you ever been scared by growth or success?  I’d love to hear your thoughts in the comments below.

Shawn Kinkade  Kansas City Business Coach

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As a business owner, there are all sorts of places where you can pick up great information.  This week if you were lucky enough to be at the Principal Connections monthly networking event – you would have picked up some great business tips from Jonathan Freiden and Seth Freiden – brothers and co-owners of the 3rd Generation company US Toy.

If you don’t know who these guys are or why you should care…US Toy has been around for 58 years as a local Kansas City based family owned business that’s grown substantially – especially in the last few years.  Considering that the average family owned business only stays in business for 24 years and only 30% make to a 2nd generation (only 10% to a 3rd generation) – these guys have clearly figured out quite a few things that we could all benefit from.

They spoke for quite a while and graciously answered a lot of questions, so I won’t try to cover everything that was said – but here are few of the highlights that I took away from the discussion:

Impact of being 3rd Generation…

There are a lot of reasons why family businesses don’t make the generational transition…especially more than one.  Jonathan jokingly mentioned that one of the reasons for their success was a lack of cousins in the family since it’s family disputes that often disrupt a transfer…and destroy a company!

The best way to mitigate those kinds of disruptions is to recognize the importance of sound succession planning and to be really clear on what’s going to happen.  (Coincidentally the sponsors of this month’s event were the attorneys from BridgeBuilders, who specialize in Estate Planning and Business Succession Planning – great guys to talk to if you are looking for a place to get started on Succession Planning).

The other thing that came out of the family aspect is the importance of valuing what the previous generation built, but recognizing the importance of upgrading and refreshing the business as needed…whether that’s technology enhancements, a change in direction or uncovering new product lines or sales channels.  You can’t get locked into the past, but you will benefit from building on a solid foundation.

Building Something for all Employees

Another idea that really stood out to me was their focus on really building an environment and company that stood for something and that people could enjoy working for.  Not only do they focus a lot on Core Values in terms of hiring and driving the business, they also put a lot of stock into hiring great people and letting them do their thing (autonomy and purpose…a killer combination).

And in case you’re wondering, this wasn’t just the Owners of the company telling people a great story – US Toy was just selected by Ingram’s magazine as one of the Best Places to work in Kansas City!

Make sure you get help

I’ll admit I’m biased on this last point, but they attributed a lot of their success over the last 3 years (since they took over the company) to extensive use of outside advisors (you know…like a business coach).  Their point is that business owners not only need to be open to 3rd party ideas, but it’s critical to bring on independent perspectives to challenge thinking and to leverage broad skills and experiences to keep executive management on top of things.  Find good people to work with and make the investment to grow your company with help from others!

There were a lot of other great points – but the bottom line is that Jonathan and Seth have taken a great local business and evolved it into a serious national player with lots of additional room for growth.  If you’re looking for some inspiration – the folks at US Toy aren’t playing around!

Are you familiar with US Toy or another great Kansas City business example?  Share your thoughts below – I’d love to hear them.

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When was the last time you took a few minutes…or better yet a few hours and really thought through what you wanted to get out of your business and what your exit strategy might be?  Have you looked at the end of the rainbow at all?

Even if you have no plans of selling or getting out in the foreseeable future, it’s still worthwhile to think about it in terms of someday…maybe 10 years, maybe 20 years…whatever that timeframe is, having a long term vision can only help you.

Anita Lieser – a broker with Apex Business Advisors just wrote a great article breaking down a very successful transaction.  I don’t know any of the details behind this particular deal, but there are several critical things you can take away from the article as you think about the long term outcome of your business.

Whether you ultimately want to sell your business to a 3rd party, pass it down to your family, sell it to employees – Anita’s article points out things that all business owners should be targeting for current and future success:

1. Positive Cash Flow

As everyone knows, Cash is King, but it’s almost impossible to overstate how important a consistent, positive cash flow is to the success (and attractiveness) of your business.  If you don’t have a positive cash flow, then you’re eating up your runway…and sooner or later the plane has to take off or you will crash, as simple as that.

If you’re not sure how well you’re doing – then it’s time RIGHT NOW to start with cash as your top priority.  Figure out where you are and what you can do to maximize that cash flow as soon as possible.  Not only will it make your business a lot more valuable to a potential buyer, it will take a lot of pressure and stress off of you as the owner right now!

2. Have a good picture of what’s going on

Related to point number one – you need to have clean and clear information about your business, starting with financials and including your top Key Performance Indicators (your numbers).

Not only will that help you run your business in the smartest and most strategic way, it will give you a very clear and valuable story to tell when you consider selling.

3.  Be objective and get help

Another big take away from Anita’s article is the importance of having a clear and unbiased view of your business.  Most business owners get very wrapped up and emotional about the business – understandable since they’ve likely worked long and hard to get it where it is.  However you have to be able to look at the business the way a bank or a potential buyer would look at it.

The good news is that you can and should get outside help.  Someone like a business coach if you’re trying to grow your business and a business broker when you’re considering selling it can not only give you expertise, they can also help you step back and see things from a different perspective (almost impossible to do on your own).

One of the absolute keys to having a really successful business – a business that works predictably, effortlessly and profitably every day is purposely creating it as if you were going to sell it to someone else (or franchise it) whether you are actually ready to sell it or not!

Have you thought about what’s at the end of your rainbow?  Whether you are ready to sell or not – I’d recommend at least meeting with a business broker (I’d be happy to introduce you to the folks at Apex) or a business coach and figure out where you stand and what (if any) improvements you could make.

What are your thoughts on selling your business?  How about building as if you were going to sell it?  Share your thoughts in the comments below and let me know if I missed anything.

Shawn Kinkade  Kansas City Business Coach

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It can be really tough to explain to people why they should spend their hard earned money with you rather than the competition.

As an example, let’s pretend that you have a catering company…and that your target market is the business crowd – larger groups that like a variety of hot and cold lunch opportunities, they need a cost effective, easy to use, reliable service.

How would you present yourself from a marketing perspective?

To make this a little more real, I thought I’d do a quick search on the term Kansas City Catering to see what was out there and how people were presenting themselves.

I’m primarily looking at web sites, but there are lots of ways to get your marketing message out there (direct mail, radio, TV, networking, social media, etc.).  The medium isn’t as important as the message – so let’s get back to the question:

“Why would I buy your catering over your competitors?”

I could tell you that I’ve been around for a long time and work with large groups:

“…proudly served the Kansas City Area corporate market for 25 years, working with groups of 10 to 6000 guests.”

I could tell you that I’ve got great tasting food:

“…we believe that presentation is meaningless unless there’s delicious food to back it up!”

I could tell you that I’m easy to work with and affordable:

“…specialized in stress-free catering at affordable prices, using only the highest quality ingredients.”

Or I could get really specific and tell you what I’m committing to:

“…handle your 100 hot meals in 3 hours if you call by 8:30am!”

Who do you choose?

What you can’t really tell from the above snippets is that many of the choices have been around for a long time…all of them have delicious food that tastes really great and most of them tell you they’re easy to work with.

When it comes to a competitive advantage…a tangible reason to make a choice, almost all of them seem to blend together. 

• I don’t actually care how long you’ve been around…can you solve my problem? 
• I assume that the food is pretty good or you wouldn’t still be around (and I’ll check for user comments or people I know – if it’s bad, I’ll know it).
• That’s great that you tell me your easy to work with – but so does everyone else and no offense, but why should I believe you?
• I might be swayed by some personality and really interesting menu items…but if I have to search for it, it loses it’s power.  Highlight it front and center (on the front page) if that’s your ‘special sauce’.

Of the catering companies I found (granted with a quick search), Grandma’s Office Catering does a great job of clarifying exactly what they can do for me when they promise they can deliver for up to 100 meals with 3 hours notice! 

Just as importantly, they make that promise front and center in all of their advertising – they’ve committed to their competitive advantage and their promise…if you happen to need quick turnaround, or just someone you can count on, you’re likely to go with Grandma.  (They also have good food and do a nice job of making their customers happy…but I assume other companies do that as well).

What’s your recipe for a competitive advantage?  Is there a promise you can make that addresses your target audiences big concerns?  Can you make a guarantee that sets the bar so high your competition can’t match it (or don’t want to)?

Food for thought…I’d love to hear your nuggets of wisdom – leave me a comment below and let me know what you think!

Shawn Kinkade   Kansas City Business Coach

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I had a crazy week this past week, a lot of late nights and not enough downtime…but it’s my fault due to poor planning.  It was the cumulative pile-up of too many things going on at once, all of them important, but not necessarily urgent (other than I had piled up too many commitments).

I forgot the lesson that not only is it alright to say ‘No’, it’s something I should consciously be doing all the time and doing more of!

Saying ‘No’ is one of your most powerful tools when it comes to getting things done and to clarifying your direction.  When it comes to getting things done, the impact is pretty obvious – you only have 24 hours in the day and most of us have way more than 24 hours worth of stuff that we could do (or would like to do) including things like sleeping, eating, hanging out with family, friends, getting work done and hopefully working ON the business as well.

In other words, you are saying ‘No’ whether you realize it or not.  Those 5, 10, 20 things on the bottom of your to do list that keep getting pushed out to future dates?  That’s you inadvertently saying ‘No’ because you couldn’t find enough time to do them right now. 

The late night wrapping up a proposal or a presentation or some important work for a client?  That’s you saying ‘No’ to your family, regular exercise or just sleeping!

Along the same lines, a few well placed ‘Nos’ can really help you clarify your overall direction and what’s important.  Most of the time people think about what they do, but it can be equally important to be clear about what you don’t do.

What kinds of clients are not a good fit for you?  (People you should be saying ‘No’ to?).  Are there jobs or opportunities that might be lucrative but not really helpful in moving you forward on your ideal path?  Blocking off all of the things that you don’t do can really help to clarify what your direction is.

A better way?

If you’re convinced that saying ‘No’ will help you out, there are a couple of things to think about if you want to do it effectively:

1. Take some time to really be clear on what it is that you want (what’s your Primary Aim?)
2. Schedule some time on a regular basis (weekly?  maybe monthly) to take a good hard look at where you’re spending your time and pick out the things that don’t line up with your most important priorities.  You may be stuck in the short term if it’s a commitment that would be painful to get out of, but use that as a lesson to avoid more of the same going forward.

What should you be saying ‘No’ to with your business (and your life)?  Are there things your doing that might be making you money but you hate doing?  Are there clients who drain the life out of you?  Share your thoughts on saying ‘No’ in the comments below – I’d love to hear them.

Shawn Kinkade   Kansas City Business Coach

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