This is a true story of a mid-size manufacturing business in a small town.  The company was stuck, unable to generate sustained growth. Bill, the owner, was ready to throw in the towel. The management team was frustrated, and considering a move to greener pastures.

Bill didn’t give up.  In his quest to cut the Gordian knot, he found the right advice and learned three critical lessons that freed his business to grow, and ultimately made running his business fun again.

Lesson 1: “Success is measured in value, not profit.”

Thinking it was time to get out, Bill met with a business broker.  He left the meeting in shock: because his business was profitable, he thought it would be valuable – that he could sell the business and retire. The shock? His business had little value.

Bill’s broker explained that although Bill had a history of profits, he couldn’t show that the company could repeat this performance in the future. “You have focused on profits, but profits are yesterday’s news. You can’t show a systematic method to generate profits, and that makes your company tough to sell.”

Lesson 2: “Your business is an engine – not a financial statement.”

The broker went on to suggest that Bill get a good business advisor, and “Start thinking about your business as an engine. The engine spits out profit, but the value of that engine is in its processes, because these processes will generate future profits.”

Armed with his new understanding that operations is the critical driver of success, Bill gathered his team and explained that he was looking for outside help, that together they were going to tune the business engine.

Bill is an engineer by training. He understood that they needed to figure out a baseline from which to work. He and his team needed to know where they were weak, so they could focus their time, dollars and energy.  He assumed it would be a long and grueling effort to find the right help and to engineer the fix.

His search led him to a consulting group that was different.  He liked the group because they
measured the business like an engineer would, in a standardized way. They were helping companies to grow when competitors were not. As they discussed the engagement, they took a few minutes to get a snapshot of Bill’s company, delivering a clear report with the ROI Bill would get from hiring the firm. They made it look easy, with a short timelime to start seeing results.  He listened, and learned the next critical lesson.

Lesson 3: “Focus on the bottlenecks – the weak gears in your engine.”

The firm shared a key lesson with him: at any one time, only a couple of operating issues are holding a company back. As soon as these bottlenecks are identified and fixed, the company moves forward --almost by magic. But better than that, the company and their advisors have control and a roadmap to move forward.

Bill saw his truths in the report. He hired the firm, and they immediately analyzed the company in depth. Their system tied operational performance directly to value. Better yet, the system measured each area in real dollars, and prioritized projects based on value.  The firm was able to show Bill that most of his challenges could be fixed at a 10X ROI.

Within a month Bill was on the path to growth, and was having fun for the first time in many years.

So how did Bill do? In his words, “It was like falling off a log to get rolling: operations are in our DNA. We had great help, and ran the business using the growth plan every day, with KPIs comparing our performance to the competition. We had a destination, and a map to get there.”  Bill’s advisors had connected their services to Bill’s needs, and together they engineered success.

What are you waiting for?

There are 650,000 businesses with revenues between $5MM and $50MM in the US.  75% of these companies are run by baby boomers like Bill. And ALL of them have professionals like you advising them.

If you are a CPA, Financial Advisor, Management Consultant or a Banker, you already know Bill.

What would your Bill think if you took a snapshot that identified the bottlenecks holding him back, and the ROI for working through those challenges? You’d have a client for life.  Getting
started is easy; click here to see how you’ll do it.

We'd like to now what you think, email gsandmann@corevaluesoftware.com