Owning a business means that you are constantly thinking about new opportunities and worrying about things going wrong. During different phases the type of things you worry about include cash, getting new customers, losing customers, staff, tax, outgrowing your premises, IT, insurances, suppliers, shrinking margins, new markets/products/services and, ultimately, succession.
Some businesses also have to consider foreign currency movements and dealing with overseas suppliers, agencies and/or markets.
Multi owner businesses have the added complexity of making sure all owners have the same goals for the business. Also, some owners may begin to explore outside interests which can be a business risk.
Cross-generational owners have extra complexity regarding owners wanting to exit on different time frames. Family businesses are also often more complicated due to family relationships that need to survive any business stress.
At Maclean Partners we are astutely aware that the stresses of each business are unique both to that particular business and to that particular point in time. Generally, a business will have exposure in at least one of the following Risk areas:
- Survival Risk (eg generating sufficient cash flow)
- Consolidation Risk (eg "What Next?"; do all owners have the same plans for the business?)
- Growth Risk (eg identifying ways of improving sustainable profit)
- Protection Risk (both 'business' and 'personal': for example – insurances "is the family home protected?" would you benefit from Key Person Insurance?)
- Succession Risk (eg does the business enable the business to en sold effectively? Is there a common succession plan? Are there strategies to grow business value before you sell?)
Typically a business owner will encounter each of these Risks at some stage. This journey does not always follow an 'upward path' – the journey usually encounters many 'wobbles'. This highlights the need for business owners to 'be prepared'.
Business owners fall into one of two categories:
Reactive business owners wait for something to happen and then (hopefully) change their business model to minimise the impact. Being reactive, they largely miss opportunities that arise.
Proactive business owners foresee 'something happening' and make the required changes beforehand to minimise any negative impact. They are also better positioned to seize opportunities.
It is true that in a buoyant economy many reactive businesses survive and many do quite well - JFK often said "A rising tide lifts all boats". However not many economies stay buoyant for long and reactive businesses are the first to disappear once an economy tightens.
Maclean Partners Business Review
At Maclean Partners we are passionate about helping our business clients. We offer complimentary Business Reviews that usually take around 90 minutes to 2 hours. These Reviews provide a great structure for business owners to identify, understand, discuss and evaluate any business issues that exist in areas such as:
- How the Business is managed (Reactive? Proactive? Formally? Informally? etc)
- Future Business Plans and Strategies
- Operational Efficiencies and Performance Issues
- Balance sheet threats
- Customer threats
- Supplier threats
- Staff related threats
- Likely Business Succession strategies
- Business Value
- Estate Planning
- Governance and Compliance
- Alignment Amongst Owners
- Legal structures associated with the Business
- Premise related issues
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