Planning
Some CEOs want to plan strategically for growth (59%), others for an exit (19%), while still others want to focus on making the company easier to run or bringing the next generation into the business (20%). All of these transitions; growth, exit, transformation or generational succession, require specific types of planning with each of the different outcomes in mind. Each of them, however, benefits from predictable cash flow and profitability.
PathFinder Group will help your small business:
Deliver a report that examines 18 value drivers, your company’s standing within its industry and the gap between estimated current value and potential value based on that standing.
Identify “Red Flags” posing a risk to your company and blocking growth.
Quantify the contribution to equity value that resolving each “Red Flag” issue will make.
Develop, collaboratively, an Executable Plan that you use as a road map for allocating resources and tackling problems with measurable ROIs whether your goal is growth, exit or succession. This sets you on the path to what we call the 3 Dimensions of Business Growth:
Predictable Profits & Cash Flow
Predictable Growth
Predictable Equity Value
According to Ernst & Young, the greatest predictor of long-term success is year over year profitable growth. We would argue that growth then is linked to and benefits each of these planning goals. Embedded in growth are all of the other determinants of success; customer satisfaction, employee engagement, systems, scalability etc. Getting there starts with planning.
Does the next generation want to lead the family business one day? Seventy (70%) percent of family owned businesses fail to make it through the second generation. By the third generation eighty-eight (88%) percent will have failed. Given the high failure rate for family owned businesses as they move from the founding generation to the 2nd and 3rd generation, how have you addressed succession planning to increase the odds of their success? What can you do? We can help.
Your preference might be exiting the business without succession but did you know that eighty-five (85%) percent of businesses listed for sale fail to close? That’s right, sellers discover the business is not worth what they thought it was and can’t finance their retirement. Exit planning is critical and in most cases will benefit from a multi-year process. We can help. We do that!
Family owned businesses maintain control best, when armed with solid plans, intentional cultures aligned with the mission, clarity of purpose and an unambiguous vision. The combination of these elements produces an unimaginably sustainable competitive advantage.