Tim Kinane

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Friday, September 21st, 2018

Unhappy with Your Business Partner? Here’s Why.

Note: This material is adapted from A Tale of Two Owners: Achieving Exit Success Between Business Partners, by Patrick Ungashick, CEO of NAVIX.

By Charles Willi, Sep 20, 2018 11:15:00 AM

Leadership speaker and guru Brian Tracy has been quoted as saying, “If you like a person, you say, ‘Let’s go into business together.’ Man is a social animal after all, but such partnerships are fraught with danger.” He’s right. Countless men and women have said “let’s go into business together,” become partners, and built successful companies. Often, these partnership relationships launch with enthusiasm and excitement, aligned around a common vision of company growth and success. Yet many business partners wake up one day to realize they are unhappy in this relationship “fraught with danger.” The change can happen shortly into the relationship or curiously can occur years or decades into a harmonious relationship. When you are unhappy with your partner, the potential dangers include slowed company growth, a tension-filled office environment, a divided company culture, and lowered profits. If left unchecked, unhappy partnerships can lead to unhappy or failed business exits. So why do some partners become unhappy with each other?

Partner shake

Many business observers have commented that being in a business partnership is akin to being in a marriage. This is partially accurate. Like a marriage, for a business partnership to be healthy and last it must be rooted in shared values, effective communication, and mutual respect. However, company partners have different goals for their business relationship than those that exist within a marriage. Also, the tools used to sustain a healthy marriage are different than the tools used in a healthy business partnership. When the proper tools are not applied, the danger of an unhappy partnership rises. In our experience, owners fail to use many of these tools, typically because they either don’t know they exist or don’t know the role these tools play in maintaining partnership alignment and harmony.

The six most common tools that get overlooked or under-utilized in partnership relationships are:

1. Written Job Descriptions

Partners working in the business often exempt themselves from this common employee management tool under the premise that the document is unnecessary because they are owners first and employees second. However, it is difficult for partners to achieve and maintain alignment if their roles and responsibilities within the company are unwritten and thus left up to individual interpretation and application.

When partners do not have current written job descriptions, a common byproduct is the blurring of decision-making authority and accountability. This, in turn, reduces efficiency and increases partner tension. It is easy to envision the problems created if every company decision and issue were subject to a vote of the partners. Not all partners can be—nor should be—involved in all decisions. Some issues are ownership-level matters that require discussion and input from the partners. Other issues are management-level matters dealing with day-to-day operational and tactical areas. Yet without written job descriptions, which partner has input and authority to make which decisions and in which circumstances remains unspecified. This ambiguity invites partners to interpret the answers for themselves—not a method that leads to alignment.

Partners can rely on precedent and ad hoc efforts to fumble their way through this ambiguity for a surprisingly long time, as long as their goals are in alignment. But, when exit draws near for one or more partners and their goals change, partners are left to reinterpret their responsibilities and reevaluate their priorities as they see fit. At that point, the lack of written job descriptions can cause significant partner difficulties and inhibit creating exit-goal alignment.

2. Job Performance Benchmarks and Evaluations

Like with written job descriptions, partners working in the business often exempt themselves from defined job performance benchmarks and periodic evaluations against those benchmarks under the premise that the exercises are unnecessary given that they are business owners. In situations where the partners are equal partners, they may also find it difficult to evaluate one another’s job performance and hold one another accountable for performance, given that they see themselves as peers rather than subordinate to one another. Each partner is left to individually interpret not only his or her responsibilities and performance, but also each other’s. This fuels misunderstanding and a lack of accountability.

3. Compensation Tied to Market Rates

Partners with identical ownership percentages (i.e., two partners with fifty-fifty ownership) often take identical compensation, rather than using the tool of tying compensation to market rates. Equal partners usually aspire to treat themselves equally, and therefore they agree early in their relationship to allocate everything equally, including compensation. In the beginning, this seems advantageous. While the business is small and cannot yet afford to pay market-rate wages to the partners, taking equal below-market compensation evenly spreads the risks and burden. Once revenues and profits increase, the partners usually enact identical wage increases, even though the partners’ positions within the company evolve.

If this continues unabated, the partners end up with wages grossly inconsistent with market rates for the position each occupies. Even the most good-natured and selfless underpaid partners may come to resent the imbalance. Grossly overpaid partners often come to resent even discussing the matter; in fairness, they are adhering to an arrangement that all the partners willingly entered into years earlier. Few issues can leak into a relationship and erode happiness like the issue of frustrations with take-home-pay.

While it would be easy to conclude that the solution is for the partners to simply adjust compensation to be consistent with market rates for their positions, this is easier said than done. Once this genie is out of the bottle, it is difficult to get it back inside.

The proper place for business partners with equal ownership to treat themselves equally is with profit distributions. Profits are surplus earnings to either be reinvested or distributed for the benefit of the business’s owners. When distributed, profits are usually shared in direct proportion to ownership (unless their ownership structure or a prior agreement dictates otherwise). Wages, on the other hand, are different. Wages are payments to people for services rendered to the business. Wages should be consistent with market rates for similar positions and for persons with similar skills and experiences.

4. A Written Strategic Plan for the Company

Many businesses manage to achieve significant revenue and profit growth without formal long-term strategic plans. Therefore, to some owners, strategic planning and plans seem unnecessary, a misuse of time, and potentially counterproductive if the process creates rigidity in the company. However, this tool helps preserve partner happiness. An effective long-term strategic planning process requires partners (and their leadership team) to debate and determine a unified course of action for the business. Their decisions are summarized in a written document—the strategic plan—to share within the organization to increase buy-ins and enhance accountability. Without an effective planning process, partners often find themselves pursuing individual initiatives and ideas, pulling the organization in different directions and undermining or outright sabotaging alignment. It’s fairly easy to become unhappy with somebody who is continuously rowing your boat in a different direction than the one you want to follow.

5. Financial Budgets

Just like many companies can grow without preparing business plans, many companies can grow and many partnerships can be happy for an extended period without preparing annual budgets. However, a well-thought-out and actively reviewed budget is an important tool to maintain good partner relations. Just as with a strategic planning process, the budgeting process requires partners to debate and determine how they will annually allocate and prioritize financial resources. The finished product—the written budget—serves as the financial song sheet for the partners (and their leadership team) to sing from. In organizations lacking a healthy budgeting process, partners likely find themselves engaged in an ongoing tug-of-war over the next surplus dollar and discretionary expense.

6. Regular Partner-Only Meetings

Partners of small- to medium-sized businesses are notoriously inconsistent about conducting regular meetings for just the company’s partners. Many partners are comfortable dispensing with the formalities of regularly held meetings, especially if all of the partners are actively involved in the business. When partners work inside the company, they may see little need for dedicated meetings for the partners separate and apart from the business’s leadership team, because they likely know most of what is happening within the company and are busy dealing with pressing issues and priorities.

Making matters worse, since the 1990s and 2000s, the limited liability company (LLC) has become the most prevalent legal form for businesses within the United States. Before then, the most common legal business form was corporations: regular C and subchapter S corporations. Corporations must have clearly designated boards of directors and officers and must hold regular owner (i.e., “shareholder”) meetings at least once per year. In contrast, LLCs usually are not legally required to name boards of directors and officers, nor are they required to hold meetings among owners (i.e., “members”). Thus, business partners today have even lower sensitivity to the need to hold regular partner meetings than was true in the past.

Without a regular, predictable, and safe forum to discuss partner-level issues, too often partners fall into the destructive pattern of leadership by committee. This blurs relationships, erodes accountability, and undermines trust. Regular partner-only meetings are the proper place to address partner-level issues. For example, “Should we sell the company?” is a partner-level question. In contrast, “Do we upgrade our photocopy machines?” is probably a management-level decision that not every partner needs to be involved in. It is difficult to maintain trust and good relations among partners if they lack regular, predictable opportunities for ownership-level conversations.

Conclusion

There are other ways in which business partners may grow unhappy with one another. Sometimes values fall out of alignment. Personal circumstances may change, spilling over into business relationships. However, the six tools discussed here are familiar and commonly recognized business tactics that too many partnerships overlook or skip past, wrongly concluding that these best-practices are unnecessary. Without these tools, the partnership relationship is weakly supported. Over time, cracks develop and compound, until finally one day you wake up unhappy and wondering what happened to the good times.

Download: “The Five Major Exit Goals Most Co-Owners Disagree About” eBook

 

To discuss your unique business, and how to plan for and achieve a successful exit,  Call 772-210-4499  or email Tim to schedule a confidential, complimentary consultation.

 

Tuesday, September 18th, 2018

The Organized Mind Book Review

How do you stay focused on the work that’s most important to your success?

Periodically, I share a favorite book review from Readitfor.me.

There is never enough time to read all the latest books – this tool is a great way to learn and to stay on top of the latest topics and new ideas.

The Readitfor.me tool has grown into a great resource for both personal and team growth, offering book summaries, micro courses and master classes. Check out this link: Readitfor.me. See how these tools can help build you personal and Team Strength.

Here is a summary of the Book
The Organized Mind 
by Daniel Levitin.

There are many arguments for having a place for everything and keeping everything in its place.

Read on to learn how to use your mind – the most powerful tool you have – to focus on the work that’s most important to your success.

 

Organized Mind

 

The Organized Mind 

by Daniel Levitin

Book Review by ReadItFor.me

A place for everything, and everything in it’s place.

It’s a principle that, for centuries, has allowed us to keep our physical world in order so that we can focus on whatever the task at hand is.

However, these days we have added the complexity of our digital and social worlds to the mix, making it harder and harder to keep things organized, and thus stay on track with the most important goals in our life.

Read on as we explore how to create an organized mind so we can get more done, and ultimately succeed in a world that is built for distraction.

The Current State of Information Overload
Each day we are confronted with an unprecedented amount of information. Each of us processes about 100,000 words a day through all of the messages we are exposed to.

The average person watches 5 hours of television each day, which is the equivalent of processing 20 gigabytes of audio-visual images.

What does this have to do with your mind and how well it’s organized?

There are two things to consider here.

First, your brain evolved to focus on one thing at a time. The processing capacity of the conscious mind has been estimated at approximately 120 bits per second, which means you can barely understand two people talking to you at the same time. Multi-tasking is a myth – your brain simply doesn’t have the capacity to do it.

Second, this means that you need to make decisions about who and what to pay attention to throughout the day. Your brain seems to have the ability to make a certain number of decisions every day, and once we reach that limit, we can’t make any more, regardless of how important they are.

This means that every status update you read on Facebook and every text message you get from a friend is competing for resources in your brain with more important things like how to finish that project that’s due by the end of the day.

Once you’ve exhausted the limit of your brain’s decision making capacity for the day, you are unable to make good decisions, and ultimately you are unable to do great work.

To understand why this is important, let’s take a look at how memory and attention work.

How Attention Works
In order to understand how to have a well organized mind, we need to know how our minds organize themselves.

There are four main components of the human attentional system, which is what drives who and what you pay attention to.

The first component is something we call daydreaming mode. This is where you envision the future, projecting yourself into a situation and imagine how that encounter might play out. The interesting thing is that scientists have uncovered that this is the default state of your mind. Basically, whenever you are NOT focused on a task, you are in daydreaming mode.

The second component is the “stay-on-task” mode. This is the mode you use when you are doing your taxes, writing a report, or trying to drive in a foreign country. Researchers call this mode “the central executive.”

While you are awake, you are in one of those two states, but never at the same time.

The third component is the attentional filter, which determines, as you might expect, what you pay attention to. Your mind doesn’t have the capacity to pay attention to everything that is going on around you, so it filters out everything that it deems irrelevant to you right now. For instance, your brain doesn’t register all of the cars zipping by you on the other side of the highway when you are on your way to visiting Uncle Joe in upstate New York.

There are two principles that the attentional filter uses to decide what to pay attention to – change and importance.

Your brain quickly notices anything that changes in the environment, and lets those things through. For instance, if you are driving on a smooth road and all of a sudden it gets very bumpy, your mind will become aware of it instantly.

Your brain also notices things that are personally important to you. For instance, if somebody in a crowded room says your name, you’ll hear it loud and clear.

The fourth component of the attentional system is the attentional switch, allowing us to direct our attention to one thing, and then to another.

Here’s a practical example to explain how this works in the real world. Let’s say you are reading a book, and you are “in the zone.” Then, all of a sudden, your phone buzzes – a change in your physical environment that your attentional filter lets through. At that moment, you decide that you want to see who just sent you a text and what it says, and you use your attentional switch to direct your attention from the book to the text message.

All of this happens so fast that we’re not aware that we are switching modes, nor are we conscious of making a decision. But that’s exactly what we do.

How Memory Works
We’ve covered exactly how memory works – or more to the point, doesn’t work – in our summary of Stumbling Upon Happiness.

The quick version of that is that we don’t remember things quite nearly as well as we think we do. And to make matters worse, we don’t always know when we are recalling things accurately or not.

Which brings us to the ultimate conclusion that our memory sucks.

So what do we do about it? We find as many ways as we can to externalize our memories. This is an idea that goes all the way back to the Greeks, and it’s effectiveness has been confirmed over and over again by contemporary neuroscience.

There is evidence of this all around you. You don’t try and remember where you need to be at every moment of the day, you put your meetings in a calendar. You don’t try and remember all of the things you need to do, you make a todo list. And so on.

And this is where we start to discuss the strategies you can employ to create your very own Organized Mind.

Getting Part of Your Mind Outside Your Body
The most fundamental principle of the organized mind is to shift the burden of organizing from our brains to the external world.

The world’s most successful people all employ systems that help them determine what to pay attention to and how to remember important things.

One of the most important reasons for this is so that they can remain focussed on the most important tasks they have to complete.

In order to understand how they do that, we need to understand what happens if they don’t.

Your mind wandering mode does more than just think about the future. It is constantly scanning the environment for things that have remained undone. For instance, if you said that you would pick up some milk on the way home so your kids can have cereal tomorrow morning, your mind wandering mode will keep reminding you to do it. Which isn’t very helpful while you are in the middle of preparing for the biggest pitch in company history.

This consumes precious mental energy that you can’t afford to waste, because, as we’ve already covered, you have a finite amount of it every single day.

The simple solution to this problem is to write every down every thought that intrudes on what you are doing. As long as you write it down somewhere you know you’ll find it when you need it, your mind wandering mode will chill out, leaving you to focus on the pitch.

A surprisingly effective system for doing this is to use a 3×5 notecard system, with one item per card. You sort those cards into different categories, such as:

  • things to do today
  • things to do this week
  • things that can wait
  • junk drawer
  • shopping lists
  • errands
  • things to do at home
  • things to do at work
  • social
  • things to ask Pat to do
  • Things related to Mom’s health care
  • phone calls to make

This might sound like busy work, but the point is that getting things out of your mind and into some system that helps you get organized will ultimately free your mind to work on the most important things in your business and life.

Once your mind wandering mode knows that there’s a place for everything, and everything is in it’s place, it will let your “central executive” get back to work without interruption.

Now that we’ve covered how our minds work and the main principles of getting organized, let’s dive into some specific tactics and strategies you can use to be more productive.

Organizing Email
Most of you have your email programs set to put through arriving emails automatically or to check every few minutes. Basically, you have set up a scenario where you are systematically interrupted hundreds of times per day.

As we’ve already explored, this wreaks havoc on your attention, causing you to waste precious energy on task switching.
Instead, check email two or three times a day, at predetermined times. Even better, to keep your mind wandering mode at bay, schedule them in your calendar.

Organizing Stuff
No matter how efficient we become at organizing and externalizing our memories, sometimes we lose things. It’s best to create contingency plans for when we do.

For instance:

  • Hide a spare house key in your garden;
  • Keep a spare car key in your desk at work;
  • Use your phone to take a picture of your passport, driver’s licence, health insurance card, and both sides of your credit cards;
  • Carry a USB key with your medical records on it;
  • When you are travelling, keep one form of ID and some cash or one credit card separate from your wallet and other cards, so that you don’t lose everything all at once;
  • Carry an envelope for travel receipts when you are out of town.
  • Etc.

Organizing our social world.
The more successful you become, the bigger your social circles become, and the more you’ll need to be able to keep your social life in order.

One strategy that most successful people use is to keep contact files with contextual information such as:

  • where they met someone new;
  • what they talked about;
  • who introduced them.

Then, they will add tags or notes to help organize those entries into categories they can easily dive in and out of at a moments notice:

  • work friends;
  • school friends;
  • childhood friends;
  • best friends;
  • acquaintances;
  • friends of friends;
  • etc.

Organizing our Time
As a leader, most of the important things you need to get done require long periods of sustained focus and thought.
So, it makes sense to organize your day in order to accomplish that.

Set aside time blocks of at least one hour at a time to do your most important work.

Also, spend 5 or 10 minutes before that session with a mind-clearing exercise. Write down everything that’s on your mind before that session so that you can devote your entire mind to the focused work that needs to get done.

Make sure to schedule breaks in your work as well. No matter how well you’ve cleared the decks for focused work, you’ll get tired and your mind wandering mode will start to sneak back in. If you start to feel the itch to check your email, see what’s going on with your Facebook friends, or catch up on the news you just checked an hour ago, this is a sign that it’s time to take a break.

The world’s most successful people work this way, and not only do they get more done, they are less tired and neurochemically depleted after doing it.

Get Your Sleep
You’ve heard this before, but it bears repeating: you need to get your sleep.

Not only because it will allow you to bring better clarity and focus during your most important work, but because your brain processes information in 3 different ways while you sleep.

First, there is unitization – the combining of discrete elements or chunks of an experience into a unified concept. For example, musicians and actors who are learning a new piece might practice one phrase at a time – sleep binds these together into a seamless whole.

Second, there is assimilation – the brain integrates new information into the existing network structure of other things you already know. In learning new words your brain works unconsciously to construct sample sentences with them, experimenting how they fit into your preexisting knowledge.

Finally, there is abstraction – where hidden rules are discovered and then entered into memory. Sleep has been shown to enhance the formation and understanding of abstract relations, so much so that people often wake having solved a problem that was unsolvable the night before.

Conclusion

There are many arguments for having a place for everything and keeping everything in its place.

The most important of which is that it will allow your mind – the most powerful tool you have at your disposal – to focus on the work that’s most important to your long-term success.

If you are like my clients, you work hard learning how to grow your company or organization. You invest the time and money to improve your team for better results and increased value. The Readitfor.me tool has grown into a great resource for both personal and team growth, offering book summaries, micro courses and master classes.  Check out this link for details Readitfor.me and see how this tool can you build your company for long term success.

Tim Kinane

Call 772-210-4499  or email to set up a time to talk about tools and strategies to lead to better results.

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Friday, September 14th, 2018

5th Annual Consultation Offer

Are you thinking more and more about your future exit and realizing you have more questions than answers? Do you know what you want out of your exit but are unsure of the best plan to achieve your goals? Are you wrestling with your ideal time to exit? Unsure how to talk to your employees? Worried about your business partners? And what can be done to minimize taxes?

These are just some of the questions we commonly hear during the confidential, complimentary 45-minute consultations we hold with business owners to help them get ready for exit. For the fifth year in a row, this month we are standing by, ready to schedule a free consultation with you to answer your exit questions.

Feel free to watch this short video to learn more. Or, schedule your consultation here or by calling 772-210-4499.

Friday, September 7th, 2018

Five habits and misconceptions that commonly hinder owners from achieving successful exits

Biz owner guy

Dear Business Owner,

You might not like this letter. Reading it could help make you a large amount of money, save irreplaceable time, and avoid an inestimable amount of stress. But you still might not enjoy reading this because it contains some facts you may find hard to hear.

Our company does exit planning – we help business owners define their exit goals and then design and implement plans that achieve those goals. In our work, it’s common that one of the major obstacles to the owner achieving exit success is the owner him- or herself. Yes, often fr comprise a large part of the problem. We usually don’t say this so bluntly because getting fired for tactless speech helps neither the client nor us. But the common reality is you – or more specifically, your habits and misconceptions – are a significant barrier to exit happiness.

Before explaining how and why you may be making your own exit harder, please know that by pointing out these issues, we are not criticizing your effectiveness as a leader nor overlooking your company’s accomplishments. You’ve built a fine company, otherwise you would not be reading this. However, building a business is a different process than exiting from a business. And just because you have built a strong company does not mean you will have a happy exit. If the reverse were true, every successful owner would have a successful exit; clearly, this is not the case. The root issue is that many owners unknowingly do certain things (or don’t do certain things) that undermine or even block their own exit success.

So what habits and misconceptions commonly hinder owners from achieving successful exits? Review the list below to spot the ways you may be hindering your own exit.

1. Remaining involved in day-to-day operations – If your company depends on your skills, knowledge, and/or experience to get the daily job done, that dependence will become a serious problem when you try to exit. Your company must be able to run smoothly without you most of the time, otherwise it will likely be worth less to a buyer and/or may not survive your exit. Undoubtedly you are good at what you do, and perhaps in the past you had to be inextricably involved in daily operations to ensure the company’s survival. But that’s in the past. To exit successfully, you must create and lead a team that can handle most operational issues without your supervision.

 

2. Remaining involved in business development – If your company cannot find and acquire new customers without your help, that, too, will present a problem when you attempt to exit. Your company’s sales power cannot walk out the door when you do, otherwise the company’s value to a buyer decreases and/or the company might not survive past your exit. Just like with operations, if you are currently involved in sales, it’s probably because you are good at it and perhaps even like it. But prospects and customers must have a whole team with whom they can do business, not just you. Extracting yourself from business development, all the way from lead generation to closing the sale, is imperative to exit success.

3. Not talking about your future exit with your top employees – Many owners treat their future exit like a “dirty little secret” (as a client once called it) and feel pressured to hide it from their top employees. That’s understandable because your exit has the potential to be a “I-win-you-lose” situation – you exit happily while they struggle with career uncertainty. The conventional wisdom, therefore, is to withhold your exit from your team until the last possible moment. That approach limits honesty, feeds paranoia, and hinders building company value. The better method is to identify your trusted co-leaders, find the win-win, and engage them in the process. This restores honesty, builds trust within your team, and creates alignment with everybody working to achieve a successful exit.

4. Not tracking performance against financial and operational metrics – When you go to exit, your future buyer or successor will want to see that the company has performed well over time and can be expected to continue doing so. Perhaps the best way to create confidence for buyers or successors is to show positive results in writing against key leading metrics and compelling goals. Examples of ways to define and track key results include:

  • Creating annual budgets and measuring performance periodically throughout the year
  • Building operational or sales dashboards and keeping score every week or month
  • Publishing long-term strategic growth plans and tracking performance against the strategic objectives each quarter or year

Many companies do not do this work, in part because it takes commitment and resources. Another reason some companies skip these steps is because their owners feel these efforts are unnecessary. Many owners are entrepreneurial at heart, and while they enjoy the creative challenges of leading a company, they do not enjoy the regular responsibilities that come with managing a company. Examples of tasks more managerial in nature include defining company goals, identifying leading indicators, diligently tracking results, and holding individuals and teams accountable. Consequently, if the owner(s) do not focus on this work, often the rest of the organization overlooks it as well. Carry this oversight to your exit, and you may find it hard to get maximum value and achieve a stable exit if the company’s ability to perform well is unproven or unclear.

5. Waiting too late to start your exit planning – Too many owners put off preparing for exit, often waiting until perhaps a year or two prior to when you would like to exit. That’s too late. Many of the accounting, tax, legal, and business exit tactics that can enhance success take years to implement and reach their full effectiveness. Plus, preparing for exit takes a considerable amount of time. If you cram all of the required work into the final 12 to 24 months prior to exit, you risk taking your eye off the company’s performance exactly when you can least afford it.

It’s common sense that the less time you have to prepare for exit, the lesser your results may be. Once you reach the point where you intend to exit in the next five years, serious exit planning and preparations must commence as soon as possible. To better understand the time and effort typically required to prepare for exit, download our free ebook, “Your Last Five Years: How the Final 60 Months will Make or Break Your Exit Success.

Congratulations on completing this open letter with an open mind. We wrote it out of a genuine desire to help you achieve a successful exit. Realizing you may be part of the problem clears the way to implementing a winning exit plan.

Sincerely,

Your Exit Planning Team at NAVIX

 

To discuss your unique business, and how to plan for and achieve a successful exit,  Call 772-210-4499  or email Tim to schedule a confidential, complimentary consultation.

Friday, August 31st, 2018

Planning on Passing Your Business to the Kids? Consider Selling a Piece of It First

If your exit strategy is to pass your business down to the next generation of family members, selling a piece of the company to an outside buyer may surprisingly make a lot of sense as part of your overall exit plan. Normally, keeping the business in the family means just that—preserving family ownership, not selling to an outsider. But selling a minority interest (less than 50%) of the company to an outside investor can help overcome some of the more difficult challenges that family business owners face in their exit and succession planning. Here’s how.

Two-Men-On-Couch

Selling a non-controlling interest in the company to an outside investor, often a private equity group (PEG) or a family office, can solve four problems that commonly arise when trying to achieve a smooth exit for outgoing family owners and prepare the next generation of family owners to lead the company effectively. These four problems include:

  1. 1. Liquidity for the Outgoing Owners

One of the most challenging issues to resolve is how to provide financial income and economic freedom for the outgoing owners, whom we will call Dad and Mom. Commonly, Dad and Mom have invested heavily in the company over the years, and consequently, a significant portion of their net worth is tied up in the company and its supporting assets, leaving Dad and Mom unable to retire or step down from the company without somehow obtaining cash from the business. Yet the company typically does not have a large amount of surplus cash sitting around to fund Dad and Mom’s exit. As they lack the cash, the most common solution is keeping Mom and Dad on the payroll well after the next generation has taken over the company. This rarely works for very long. At some point, Dad and Mom may come to resent and/or worry about being continuously dependent on the company. Or, the next generation, whom we will call the Kids, may grow tired of the payroll burden if they do not see any light at the end of the tunnel. Keeping Dad and Mom permanently on the payroll is not a winning solution.

Selling a minority interest of the company to an outside investor presents a more viable solution on how to create financial independence for Dad and Mom. The outside investor’s cash infusion can fund some or all of the outgoing parents’ financial needs, freeing Dad and Mom from staying on the payroll indefinitely and giving them power over their own assets. Meanwhile, the Kids maintain a controlling interest in the company. At a future date, they may pursue buying out the minority investor if they desire to restore 100% family ownership of the company.

2. Eliminating Personal Guarantees

A second significant financial obstacle common within family-owned companies deals with personal guarantees on the company’s commercial or trade debt. Often, Dad and Mom have covered the guarantees up to that point, but the Kids lack the collateral and leadership track record to assume that responsibility when Dad and Mom exit. This scenario puts Dad and Mom in the uncomfortable situation of turning over operational control of the company to the Kids while having to stay on the hook for the financial risk. Few parents will be enthusiastic about that prospect. The Kids have reason to be unhappy too, as they will likely wish to avoid burdening their parents. Also, as long as Dad and Mom provide the personal guarantees, they will have the power to exert influence or control over the company, which is typically a sensitive subject for the Kids. If the issue of personal guarantees remains unaddressed, it can prevent the entire family from achieving a successful exit.

Selling a minority portion of the company to an outside investor, such as a PEG or family office, can eliminate the personal guarantee barrier to exit success. The entrance of an outside investor can give lenders sufficient confidence and collateral to remove their requirement for any personal guarantees. Furthermore, PEGs and family offices can often secure for the company more favorable debt terms and rates due to their experience and long-standing relationships with their preferred lenders.

3. Insufficient Professional Management

One other major challenge within many family businesses is how to inject professional management expertise into the company without surrendering the family’s leadership of the company. This need becomes acute as the company grows and transitions from one ownership generation to the next. You have likely witnessed family-led companies that struggled or perhaps even collapsed because the successor generation lacked sufficient leadership talent and experience to run the company.

Bringing in an outside investor can upgrade the company’s professional management without displacing the family’s controlling interest. First, outside investors will usually occupy several seats on the company’s board of directors. The right investor will fill these seats with quality leaders who enhance the company’s strategic leadership, experience, and industry contacts. Additionally, as part of its investment, the outside investor may provide funds to hire new managers and employees to work for the family owner. Commonly needed positions include an experienced chief financial officer (CFO) and professional sales manager/leader. A significant upgrade in talent and experience at the board and management team level is achieved without undermining the family’s operational control of the company.

4. Objective Advice and Counsel

Within family-owned companies, personal relationships and dynamics can encroach into business matters, blurring communications, responsibilities, and accountabilities. These relationships can harm company growth and prevent Dad, Mom, and the Kids from achieving a smooth exit and succession. Even within well-functioning family relationships, when facing serious business issues, it is difficult to maintain objectivity when there are only family members in the room.

Here, too, an outside investor can add value to the family business as it moves through a succession process. The investor, again through its minority representation on the board, adds the missing third-party objectivity, perspective, and controls. For example, the investor will likely require the company to prepare annual business plans and budgets and periodically review them at the board level. Also, executive compensation—always a touchy subject in a family-owned company—will be set according to market rates and evaluated objectively according to human resources best practices. These types of steps reduce the risk of nepotism and address the concern that family politics will detrimentally influence major business decisions.

Conclusion

For the benefits of succession to materialize, family-owned businesses must work with the “right” investor – one whose values, business model, and expectations align with those of the family. As such, finding the right investor will take time and careful preparation. Ironically, the best way to keep the business in the family may be to sell a piece of the business to somebody outside of the family.

Your last five years link

To discuss your unique business, and how to plan for and achieve a successful exit,  Call 772-210-4499  or email Tim to schedule a confidential, complimentary consultation.

Thursday, August 23rd, 2018

When It Comes to Exit, Do Not Go Out on Top

Athletes, celebrity entertainers, politicians, models—everybody seems to want to “go out on top” at the end of their careers. At first glance, it should be the same for business owners; they, too, should strive to go out on top when they exit from their business. After all, in order to sell the business for maximum value, create a sustained business legacy, and exit under their own terms, owners should exit at the business’s peak—right? Perhaps not.

 

Man-On-Top-Of-Mountain

Few companies grow in a perfectly straight upward line; most experience varying rates of growth over time. Consider the following simple illustration of a business’s growth cycle, divided into five phases, lettered A through E.

 

Business Phases

 

Ask a room full of business owners which is the ideal phase from which to exit their company, and the most common answer is Phase C as shown below.

business phases 2

 

On the surface this makes sense. If your goal is to sell the business for its maximum value, it seems logical to sell when revenues and profits are at their highest. If you want your company to continue so that employees and customers are not left stranded, then you might also think that the business needs to be at peak performance to survive the transition. However, it often does not work that way.

To achieve a happy and successful exit, do not go out on top. Rather than exit at Phase C, owners must consider exiting at Phase B in order to achieve their best results.

business phases 3

 

Here is why. Let’s examine the goal of selling a business for the maximum value. While there are many factors that contribute to a business’s sale price, one of the most important is the company’s prospects for future growth. Buyers do not purchase a business for its past performance—they only use past performance as a reference point for evaluating the future growth. A business that has peaked is potentially less valuable to a buyer if the company’s revenues and profits may be expected to slow or decline in the immediate future. Buyers need to believe that the business’s next three to five years are likely to be a time of continued profitable growth. That is Phase B, not Phase C.

There is a second reason to consider selling a business to maximize value during Phase B rather than Phase C. About two-thirds of business sales include an earn-out for the seller. Earn-outs are a provision in the deal where the seller may receive additional future compensation based on the business achieving certain future results, such as revenue or profitability goals. Selling the business at its peak in Phase C could lead to receiving less or even nothing from the earn-out.

Next, let’s examine the goal of creating a sustained business legacy. Owners who exit at the peak are turning over their company to successors right when that business is potentially about to go through a difficult time. As the business leaves Phase C, it will likely experience some or all of the following: slowed growth, reduced profits, tightening cash, shrinking margins, increased competition, or declining backlog. Turning over a business in that environment is not a recipe for a smooth transition and does not bode well for creating a sustained business legacy. Owners who want their companies to not only survive their departure but also thrive after their exit may need to act in Phase B, not Phase C.

Last, let’s examine the goal of exiting on one’s own terms. For many owners, this means during and after exit they need to have peace of mind that they did things the right way. Achieving peace of mind comes from honoring employees, respecting customers, acting consistently by a set of values, and upholding the company’s reputation. Owners who exit in Phase C risk jeopardizing all of this, again because of the potential difficulties the business may face ahead as it leaves Phase C. The new owners and leaders may need to take corrective actions such as cutting jobs or scaling back services, undermining the outgoing owner’s sense of leaving the company in good condition.

For all of these reasons, it may be advantageous not to exit on top, but rather before the company reaches its next performance peak. This is easier said than done. First, you must assess where the business is within these various phases. While it is impossible to predict the future, it is possible to make forecasts based on careful monitoring of industry and economic trends, combined with proven strategic planning processes. You are not guaranteed to be right, but a sound forecast increases the likelihood of success.

The second major challenge when attempting to exit prior to the company’s peak is emotional—it is difficult to leave a business in Phase B. Phase B typically produces some to all of the following: rapid sales growth, increased profits, strong backlog, improved margins, surplus cash, eager customers, and high employee morale. Few owners want to exit from a company while having that much fun. Yet to exit successfully, that is often what is required.

Consider watching our on-demand informational webinar on how to know when it’s time to exit.

To discuss your unique business, and how to plan for and achieve a successful exit,  Call 772-210-4499  or email Tim to schedule a confidential, complimentary consultation.

 

 

 

 

Monday, August 20th, 2018

Finding Your Unicorn: Why Some Strategic Buyers Pay Seemingly Mythical Value for Certain Acquisitions, and How to Find this Buyer for Your Business

Exit Resource

 

Are the stories about companies selling for incredibly high multiples fact or fiction? Are they true? Why does this happen, and how do you find that one buyer who may pay top dollar for your company when you exit?

In this webinar, NAVIX guest speaker Andy Mason shares his decades of experience to explain the difference between your company’s “core value” that most buyers may pay for, and the “strategic value” that may lead to a huge premium price at sale.

Andy Mason

Join us to learn:

  • How and why traditional valuation methodologies are deficient
  • The difference between “core value” and “strategic value”
  • How to find your unicorn buyer

 

Register Now

 

Check out our archive of all past NAVIX exit planning webinars:
Click here to view now

Friday, August 17th, 2018

Nine Ways Buyers Have You at a Disadvantage When You Sell Your Company

If you intend to exit from your company one day by selling to an outside buyer, at some point in the process, you may well find yourself feeling like the diminutive David facing the monstrous Goliath. And for good reason. Buyers possess fundamental advantages over most sellers due to their diverse experiences and resources. These advantages enable buyers to potentially dominate the process of acquiring your company and put you at risk of receiving a lower price and less favorable terms than might otherwise be available. When you go to exit, if you are unaware and unprepared to counter buyers’ advantages, your exit may be less profitable and more stressful.

Nine Ways Buyers Have You at a Disadvantage When You Sell Your Company_GettyImages-147205304

Here are nine specific ways buyers often have the upper hand and how to combat them.

  • Money/Cash – In most situations, the potential buyers have it and you do not. There’s an old saying that rings especially true here: “In any negotiation between two parties where one has all the money and the second has none, the party with the money wins.”
  • Emotional Investment – Buyers interested in acquiring your company are likely to have low to no emotional investment in the deal, whereas it’s common for business owners to describe the companies as “their baby” or “their third child”. A deep emotional investment in the business is an asset and a source of pride while growing and leading the company, but it can make you vulnerable during the negotiation process.
  • Deal Importance – Many buyers are serial purchasers—if acquiring your company falls through, they simply move onto the next transaction without suffering any losses. For most owners, getting the deal done is supremely important. Without a successful transaction, you likely cannot achieve your business and personal goals.
  • Internal Team Experience – Buyers usually have a team of full-time personnel with significant deal experience, often with a history of dozens of transactions. Most business owners have few to no employees with deal experience, including themselves.
  • Outside Specialists – Buyers usually have a team of external advisors they regularly go to for transaction advice and services, including lawyers, accountants, investment bankers, commercial bankers, and others. These advisors often specialize exclusively in transaction work. In contrast, business owners often use their existing generalist advisors who may have limited deal experience.
  • Market Knowledge –Your future acquirer will most likely have deep knowledge about relevant M&A activity in your industry at the time you plan on selling your company. Through formal research and first-hand experience, they will likely know key M&A trends, multiples, players, and opportunities. Sellers often lack this information and risk over-relying on anecdotes and assumptions.
  • Experienced Negotiators – Buyers are not infallible superbeings, but most have extensive experience negotiating deals. Therefore, they may know a few tactics that help advance their interests and position. Most owners get good marks on street smarts, but in many cases, the owners’ job does not require him or her to negotiate a steady stream of deals worth many millions of dollars.
  • The Process is the Job – Buyers, whether strategic buyers or financial buyers, typically have people they employ whose primary or sole job function is to work on potential acquisitions. For them, this process is their job. In contrast, for sellers like you, preparing the company for sale and then supporting the sale process is a burden you will absorb on top of running the company. For you, the process is a distraction from your everyday job and a big drain on time, money and energy.
  • All in a Day’s Work – Because the process is the job for your future buyer’s people, the work, analysis, stress, and decision-making associated with potentially acquiring your company will be just a typical day’s work for them. When you finally go to sell your company, you will likely find yourself on unfamiliar ground, far outside your experience and comfort zone.

These potential buyer advantages will not occur in every given situation, and not all buyers are equally experienced and competent. However, given these obvious advantages, it becomes easy to see how buyers can outmaneuver sellers if left unchecked. As a future seller, you can take reasonable precautions to reduce or eliminate these buyers’ advantages:

  • Add people to your team who have deal experience. It is not unusual for our clients, once they recognize a sale is in their future, to fill open senior management positions with people who have deal experience.
  • Build a team of specialist advisors. Your accountant, lawyer, investment banker, and exit planner should all have extensive experience working with companies and transactions similar to yours.
  • Meet with your advisory team well in advance of your future sale. Too many owners only convene an advisory team shortly before they want to sell. That’s a mistake. Get your team together several years before you intend to sell and meet with them at least annually. They can help prepare you for the process and experience. They also should be able to help educate you on relevant market conditions, trends, and valuation multiples.
  • Distribute surplus cash from the company to build your personal liquidity prior to the sale. The more liquidity you have at home, the less stressful the sale process is likely to be.
  • Delegate responsibilities off your plate to others on your team for two potential reasons. First, reducing dependency on you usually increases company value. Second, freeing up time creates additional bandwidth for you to support the exit process without getting overwhelmed.
  • Take the time to educate yourself. Your advisors will help, but you can learn a lot about what to expect with just a little research. This complimentary webinar, “What to Expect When You are Expecting to Sell,” is a good starting point.

Preparing for exit well in advance and with expert help will go a long way towards evening the odds between you and your buyers. At NAVIX, our clients start the sale process prepared, with more than just a slingshot in hand. Contact us to discuss your exit goals and get answers to your exit questions.

 

To discuss your unique business, and how to plan for and achieve a successful exit,  Call 772-210-4499  or email Tim to schedule a confidential, complimentary consultation.

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Thursday, August 9th, 2018

How a Bag of FRITOS® Can Help You Plan Your Business Exit

According to the FritoLay company website, FRITOS® are “still satisfying fans after more than 80 years.” Surprisingly, these classic corn chips can also help business owners plan for and achieve successful exits. Here’s how.

Fritos

Exiting from a company is expensive. If you are like most owners, your business exit will be the costliest thing you ever do. Nobody likes incurring exorbitant costs, but in this situation, costs incurred at exit can be more than merely distasteful. High costs can undermine or outright block you from achieving a successful and happy exit. If exit costs are too high, you may not have enough net proceeds to achieve your personal financial goals and needs. Excessive costs also take away from your ability to reward and thank key employees at your exit, and you may find yourself unable to exit at all, trapped inside your company. For these reasons, it is imperative that you understand the costs you face at your exit and begin planning well ahead on how to minimize them.

Unfortunately, many owners get caught off-guard at exit, surprised by the different types of expenses and dollar amounts. It is not difficult to understand why this occurs—most owners have never exited a company before, so the process and costs are unfamiliar. That is where our bag of FRITOS® comes in handy. Separate this salty snack’s name into its component letters, F-R-I-T-O-S, and you have a summary of the costs commonly incurred at exit:

  • Fees
  • Repairs & Improvements
  • Taxes
  • Opportunity
  • Soft

Let’s briefly look at each cost category:

Fees (F) represent costs incurred from professional service providers to help you prepare and execute the transaction. Whether you are selling your company to an outside buyer, selling to your employees, or giving it to your children, there will be some degree of fees involved. In nearly all situations, your exit will require professional accounting and legal work. If you intend to sell the company, you will likely also wish to invest in investment banking services. Fees vary greatly from one exit to the next, but do not be surprised if the total fees approach five to ten percent of the total company value, especially if you are selling the company.

Repairs & Improvements (R & I) are costs incurred to get the company ready for exit. Conceptually, this is no different than fixing that broken gutter and applying a fresh coat of paint before listing your home for sale. Repairs & Improvements will differ widely from one company to the next. Some repairs and improvements have the potential to increase sale price at exit but are not mandatory, while others you must make, otherwise the company may not be sellable at any practical price. For example, if the company has pending legal, regulatory, HR, tax, or environmental issues, you may need to settle the matter before pursuing any exit strategy. The earlier you identify needed repairs and improvements, the easier it will be to address them.

Taxes (T) are commonly the highest cost incurred at exit. Depending on whether you are selling your company or passing it to family, potential federal taxes can easily range from 20% up to 40% or more of the company value. State and local taxes (SALT) can add to that figure. That’s the bad news. The good news is there are usually multiple tactics to materially reduce the taxes at exit so long as you start planning early enough.

Opportunity (O) costs are incurred if you fail to take a certain action that otherwise would have created a benefit. While typically you do not write a check to pay for an opportunity cost, the amounts involved can be significant. Here is an example. Assume companies in your industry are currently selling for in between four and six times earnings, and your company is generating $2 million in EBITDA. It is critical to know what characteristics influence whether the sale multiple will be closer to four or to six. If you learn that companies with high customer diversification tend to sell for a higher multiple, but your company has one large customer that accounts for 25-30% of revenue, then you must increase sales from other customers between now and exit to reduce that concentration. If failing to reduce customer concentration contributes to a sale price of five times earnings rather than six, the opportunity cost to you would be $2 million.

Soft (S) costs are another type of cost that do not require writing a check, yet they arguably have the highest potential to deny you exit happiness. In this context, soft costs are the issues, concerns, or fears that “take a toll” (notice “toll” = cost) on you or other people impacted by your exit, unless and until they are satisfactorily resolved. Common examples include worries and stress about: reaching financial freedom, the business’s future survival after your exit, your key people being treated fairly, how exit will impact family routines and relationships, and concerns about exiting on your terms. It is not unusual for the potential soft costs to keep you up at night as exit draws near, moreso than any other cost category.

Exit is expensive, but the costs do not have be crippling. The key is planning ahead. Once you reach the point where you intend to exit within the next five years, you have reached the final stretch. Time flies—five years is only sixty months. Invest the time now to a) understand exit costs and b) identify tactics to reduce those costs. So grab a bag of FRITOS®, something cold to drink, and let’s get started.

To discuss your unique business, and how to plan for and achieve a successful exit,  Call 772-210-4499  or email Tim to schedule a confidential, complimentary consultation.

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Monday, August 6th, 2018

How do you get your point across in a world full of distractions?

Periodically, I share a favorite book review from Readitfor.me.

There is never enough time to read all the latest books – this tool is a great way to learn and to stay on top of the latest topics and new ideas.

The Readitfor.me tool has grown into a great resource for both personal and team growth, offering book summaries, micro courses and master classes. Check out this link: Readitfor.me. See how these tools can help build you personal and Team Strength.

Here is a summary of the Book Brief by Joseph McCormack.

Getting you point across clearly and concisely, saves resources- time and money.

Read on to learn how you can get your point across in a world full of distractions.

 

 

Brief

 

Brief   
by Joseph McCormack

Book Review by ReadItFor.me

 

We live in an attention-deficit economy, and being brief is both desperately needed and rarely delivered.

When we are not clear and concise, there are consequences. Time, money and resources are wasted. Decisions are made in confusion, great ideas don’t get pursued, and deals take far too long to close.

This book is all about getting your story straight, and then getting to the point. Quickly.

Join us for the next 12 minutes as we explore how to communicate your message briefly, and powerfully. As author Joseph McCormack points out – it’s like Six Sigma for your mouth.

Let’s get started.

Why Brevity Is Vital

These days, everybody is busy. Especially executives. Your rambling marketing message or sales pitch is likely to get lost in the daily flood of information they struggle to stay on top of.

As McCormack points out, being brief is not just about time. The more important point is how it feels to the audience. It’s not about using the least amount of time. It’s about making the most of the time you have.

There are three things you need in order to adhere to the principles of brevity – be concise, clear, and compelling. What follows naturally from this is that you also need to have a through understanding of your subject matter.

Mindful of Mind-filled-ness

Living in a world full of distractions means that the people around you are mentally stretched. That makes getting to your point before your audience gets distracted an imperative.

There are 4 main sources of pressure your audience is battling as you try and get your point across:

  • Information overload, which has gotten worse as social media and email invades our lives more and more every day;
  • Inattention, causing them to struggle with paying attention longer than 10 seconds at a time;
  • Interruptions, which means that there are many different things competing for attention at all times;
  • Impatience for creating results, which causes people to be stressed almost all the time.

 

Here’s the point. Even if you are given 30 minutes to make a presentation, you have far less than that before your audience tunes you out.

Why You Struggle with Brevity: The Seven Capital Sins

In spite of the evidence that brevity is a necessity in today’s world, it turns out to be difficult to master because of what McCormack calls the “seven capital sins.”

  • Cowardice. You don’t have the guts to be clear and take a stand on the issue, so you mask your message in mounds of jargon and buzzwords.
  • Confidence. You know the material so well and can’t help explaining it in painful detail.
  • Callousness. You don’t respect people’s time. When you say “this will only take a minute”, it ends up taking many times that.
  • Comfort. When you are comfortable with an audience, you let yourself get wordy and drag the story out.
  • Confusion. You tend to do your thinking out loud, not mindful that your audience would rather hear the finished product.
  • Complication. You think that the issue is really complicated, missing the point that your job is to simplify it for people.
  • Carelessness. You don’t think about what you are going to say deeply enough, and so your message gets mixed up.

Brevity Tool #1: BRIEF Maps

People who start to gain experience in making presentations and sales pitches mistakenly abandon outlines, thinking they are a tool that only rookies use.

Professionals understand that an outline is critical to their success. McCormack tells us that there are five immediate benefits you’ll get by using them.

Outlines keep you:

  • Prepared, so you are ready to deliver your message.
  • Organized, so you understand how all of your ideas connect.
  • Clear, so you are certain what your point is.
  • Contextual, so you can draw a bigger picture so your point stands out.
  • Confident, so that you know what to say, inside and out.

The BRIEF way to do an outline is organized as follows:

  • B: Background or beginning;
  • R: Reason or relevance;
  • I: Information for inclusion;
  • E: Ending or conclusion;
  • F: Follow-up or questions you expect to be asked or that you might ask;

This format can be used for anything you need to present – from an important project update to your team to the most important sales pitch of your life.

Now that we’ve covered how to outline your message, let’s move on to how to deliver it.

Brevity Tool #2: The Role of Narratives

Bore your audience to death with corporate-speak and they’ll tune you out faster than you can say “next slide.” But tell them a good story and they’ll gladly give you their undivided attention.

McCormack introduces us to the idea of the Narrative Map to help us do just that. There are five elements in the map.

The focal point

This is the central part of the story, and tells the audience what it’s about. For instance, at the beginning of his presentation launching the iPhone, Steve Jobs said “Today, Apple is going to reinvent the phone.”

Setup or challenge

In the context of a marketing or sales message, this is the challenge, conflict, or issue in the marketplace that your organization is addressing. Every great story includes a dragon that needs to be slayed.

Opportunity

This is about communicating the opportunity that the challenge poses. Some people call this an unmet need or an aha moment.

Approach

Now we move on to how the story unfolds. This is the how, where and when of your story, describing how you’ll solve the problem or take advantage of the opportunity. There are usually three or four key points to be made here.

Payoff

All good stories include a payoff at the end. This is where you paint the picture of what life looks like for your audience after your solution is implemented.

So that’s how you outline and then craft a narrative that gets communicated clearly, concisely and powerfully.

Let’s now move our attention to a method for being clear in our every day conversations with the people around us.

Brevity Tool #3: Controlled Conversations and TALC Tracks

As McCormack points out, if we are undisciplined in how we present information, we are even more undisciplined in how we have our daily conversations.

Being brief in a conversational setting means shifting from endless monologues to what he calls having controlled conversations. These conversations have a rhythm, a purpose, and a point.

In order to get conversations right, there are things you need to do, and things you need to avoid.

Let’s start with the three common mistakes that draw people into long, unwieldy conversations:

  • Passive listening: Letting the other person babble on about everything and say nothing. As a result, there is no control.
  • Waiting your turn: Letting the person talk, then jumping in to say your part. As a result, two separate conversations are happening.
  • Impulsively reacting: Responding to a word or thought the other person said. As a result, there is no clear direction in the conversation.

Now let’s move to a structure for balance and brevity. McCormack calls these TALC Tracks.

T is for Talk

Somebody in the conversation starts talking. It could be you or the other person. There are two things to consider at this stage:

  • Be prepared to say something when the other person finishes speaking.
  • Make sure your response has a clear point.

AL is for Actively Listen

Listen closely to what the other person is saying the entire time. Don’t zone out, multitask, or otherwise take your attention off the other person. There are two things to consider at this stage:

  • Ask open-ended questions related to what you heard.
  • Dig deeper into the parts of the topic you are genuinely interested in.

C is for Converse

When a natural pause happens in the conversation, it’s your turn to jump in with a comment, question, or sometimes a bridge to another topic. There are three things for you to consider at this stage:

  • Don’t use your turn to start a new conversation.
  • Keep your responses short.
  • Know when to stop so the other person can start talking again.

When and Where to be Brief

Now that we’ve covered the foundations of how to be brief, let’s go into some specific examples of when and where to be brief.

In Meetings

We all know that meetings suck. There are three villains that you need to slay in order to make them suck less.

  • Reduce the amount of time devoted to them. Put the BRIEF back in briefings.
  • Consider a standing meeting, or a meeting with no table. And most importantly, meetings should be more like a conversation than a presentation.
  • Making sure that no one person dominates your meetings. That includes outside presenters.

Social Media

McCormack suggests that we create social media posts and emails that respect a busy executive’s time. That almost always means making things shorter.

Presentations

The best way to deliver a presentation is to first understand what your audience wants to hear, and then speak to those things, and those things only.

Job Interviews

Nobody likes job interviews, and that includes the person doing the hiring. When you are the candidate, create a BRIEF Map that quickly explains why you are qualified. Then, tell a story that shares some of your past successes that demonstrate what your potential employer is looking for.

Sharing Good and Bad News

When you are sharing good or bad news with your team, always get to the point quickly. Then, let some time for the news to sink in and leave time for them to ask questions.

When you are delivering bad news in particular, consider three important issues:

  • State bad news simply and clearly, without pulling punches.
  • State the real reasons for the bad news so people know what’s happening.
  • Take advantage of tough situations to have a heart-to-heart.

Conclusion

Everybody is busy. The world is begging you to get to the point quickly.

As Franklin D. Roosevelt once famously said:

Be sincere, Be brief, Be seated.

 

If you are like my clients, you work hard learning how to grow your company or organization. You invest the time and money to improve your team for better results and increased value. The Readitfor.me tool has grown into a great resource for both personal and team growth, offering book summaries, micro courses and master classes. I recently connected with Steve Cunningham (the founder) and negotiated a great deal for people in my network. Check out this link for details Readitfor.me.
and see how this tool can you build your company for long term success.
Tim Kinane

Call 772-210-4499  or email to set up a time to talk about tools and strategies to lead to better results.

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