Carl L Gould
A company’s assets can be sorted into two buckets: tangible and intangible assets. Tangible assets are things the firm can buy or sell, such as inventory, real estate, equipment, machinery, offices, or company vehicles. Most business owners are pretty comfortable inventorying and appraising tangible assets.
But do you know how to measure the value of your intangible assets: your staff. Are you getting the most out of your employees? Are they as valuable as they should be? How do you know who to hire, which positions to create, and whether a job candidate is the best fit with your firm?
Start By Establishing Measurements for Positions, Not People
Instead of starting with employee traits for an evaluation, start by mapping out the parameters of that position. What should anyone in that job accomplish? Why does the role exist? What purpose does it serve? What personality traits should anyone in the post have? Establishing benchmarks for each job allows you to assign performance standards, desired personality attributes, and expected contributions.
Each Position is Assigned a Personality and a Prototype
Some business owners are uncomfortable assigning an ideal personality for a job. But when you take the current employee out of the equation, you can start thinking about traits that suit the position and match the business culture. For example, should a CMO be outgoing, creative, and enthusiastic in your firm? Does your organization need a meticulous, team-oriented, and predictable COO?
Once you put a personality in place for the position, you add a list of essential functions of the role to round out the prototype. For instance, in some companies, a CMO manages communications, creates sales materials, and handles PR. In another firm, the CMO may also oversee sales. Each company is different.
With position benchmarks in place, evaluating an employee’s or prospects’ suitability becomes much more manageable. If they match the job’s benchmarks well, it will be easier for them to meet your company’s expectations. Therefore, they will probably be more effective, experience success, and consequently show more loyalty. Matching people to benchmarks is a win-win.
The Role of Company Culture
The personalities and prototypes for a job can vary significantly among companies. Don’t assume that all positions look the same in all organizations. The change among industries is significant, so the needs of positions will vary quite a bit. Additionally, company culture plays an important role.
For example, suppose your company culture is innovative, creative, and brash. In that case, you may want an extroverted, big-idea CMO comfortable taking big swings and making a splash with the public.
Conversely, another company may be conservative and research-driven. They may need a CMO with focus and a professional, restrained manner.
Looking at these two examples, it becomes easy to see that companies A and B need two different types of CMOs. Can you imagine how unhappy the high-flying creative would be working for company B? And how frustrated company A would be if they hired a restrained introvert?
Benchmarking Needs Change Based on a Company’s Growth Cycle
In the startup phase, companies operate differently. They must be nimble, run lean, and change quickly to meet market needs. But established businesses should be focused on creating order, systems, and processes that allow them to scale up.
That’s why it’s wise to revisit benchmarked job descriptions as a firm grows. For instance, independent workaholics are invaluable initially but can get in the way once systems are in place. Process-driven staffs are excellent for a large organization but can be ineffective in the launch phase.
Benchmarking is the First Step to Increased Productivity
Benchmarking is not an exact science. Assumptions are made based on your circumstances. But it is an effective way to begin inventorying and leveraging your company’s intangible assets. Creating benchmarks for each position makes it much easier to identify and find people who can achieve their full potential within your organization. You start to hire better “fits” with your culture and requirements. You’ll also identify existing employees who may not fit into the company structure.
If you can find the right person to do the right job, you’ll be happier, they’ll be more productive, and your company will grow faster.
Carl’s Interview Starts at 20:57
Selling Your Business? Avoid These Mistakes!
Selling a business is not as straightforward as selling a house. After all, a company is a complex organism, and only some (or maybe none) of the value lies in physical assets. I’ve built and sold multiple businesses in my 30+ year career. In those first sales, I learned from my mistakes. And after a few hard knocks and some intensive research, I now know there’s a better way. If you’re considering selling your business now or in ten years, this article can help you avoid common mistakes.
Mistake #1: Doing It Alone
Most of us don’t sell companies very often, so very few entrepreneurs are experts at selling firms. That’s why so many business owners bring in a few professionals. Start before the sale by hiring an experienced business valuation expert. They will assess the firm to determine the fair market value. This valuation gives the owner an idea of how much the enterprise is worth “as is” and should also provide pointers to improvements that will increase the size of future offers. Often, with a few small improvements, you can substantially increase your market value.
Your financials will be held to a very high standard during a sale, so even minor errors or omissions can cause big problems. A reputable accounting firm with experience in business mergers, sales, and acquisitions, can help your internal accounting team compile financial statements and documentation in sale-friendly formats. Accounting consultants will help the team create, modify, or clarify income statements and balance sheets, catch errors, and ensure financial records and documents are above reproach.
Corporate law attorneys specializing in sales and acquisitions can handle legal or regulatory situations that may affect a potential sale. In addition, those same lawyers should be on hand to review contracts and agreements, such as leases and vendor contracts, to ensure they are transferable to a new owner.
Mistake #2: Choosing the Wrong Type of Sale
Business sales can be structured in a variety of ways. Each type of sale has its own benefits and drawbacks. So, make sure you’re working with a business consultant and a corporate attorney who understand sales and acquisitions.
We’ve listed the most common sale structures here.
Private Equity Firm
These buyers usually have the financial resources and expertise to grow a business. However, a private equity firm may have a short-term investment horizon, which means they are focused on maximizing their return on investment rather than maintaining the long-term viability of a company.
An employee stock ownership plan (ESOP) enables employees to purchase shares in the company over time. Employee ownership rewards staff members and ensures that the firm is run by people who are invested in its success.
An employee ownership consultant may be required because the Employee Retirement Income Security Act (ERISA) of the Department of Labor and the IRS’s Internal Revenue Code section 404(a)(3) govern ESOPs, so deviations from the prescribed process, intentional or accidental, break federal laws.
While it may seem simple to pass on the family business, it’s important to formalize the process to address legal considerations and prevent anyone from contesting ownership. The transfer should be formally documented and detail valuation, taxes, and ownership structure.
If an individual wants to buy the business, the process should start with a letter of intent (LOI) outlining the proposed terms for sale. Owners should also qualify individual buyers before moving forward by conducting background checks.
Selling to a Competitor
Your business may have the most value to your competitors. These types of sales usually require the seller to agree to non-compete clauses, which may limit their ability to run businesses in the future.
Mistake #3: Not Hiring a Consultant
It’s easy to view consultant fees as an expense, but when it comes to selling a business, their role is to minimize risk and maximize the asking price. Good consultants are not cheap, but their recommendations can protect owners from legal and financial threats. A consultant’s recommended improvements to the business can add millions to the asking price. And accountants’ contribution to bookkeeping can prevent costly delays or dropouts. When you look at the bigger picture, you can’t afford to keep them out of the process.
Want to learn more about how to get your business ready for a profitable sale? Contact 7 Stage Advisors today and start talking about your business.
Carl Speaks to Long Island’s #1 Internet Radio Station WLINY on Business Owner’s Point of View on NFL and Player Protest
Have you thought about how the player protest in the NFL affects the team owner? Does the protesting really affect the game?
Starting and running a business requires many things and having certain skills is definitely one of the things that you should put your focus on in this 2017. Lack of skills is one of the main reasons why people are not making progress in their careers. Skill gaps often lead to lower customer satisfaction, delays in product presentation, and many other problems. The same goes for those running a business. The good news is that acquiring skills today is much simpler than 10 or 50 years ago. Namely, you can now learn a wide range of skills online. However, if you just plan on running the business, there might not be a need for you to have specific skills like these. For many business owners, they will look to hire people with these specific skills that will be needed for the job. When hiring people to your business, they will probably need a device to ensure they can complete work to a higher standard. As the manager of this business, it’s important for you to oversee all operations. With the help of https://www.fleetsmith.com/features/management, you can configure these devices exactly how you want them. This should increase business efficiency and productivity. However, if you are passionate about learning new skills as well, then you should do it. You can never have too many skills as a business entrepreneur. There is no doubt that this practice is convenient, flexible, provides comfort, and lets people get a new perspective on business. The following is a shortlist of 6 skills everyone can learn online for a productive and profitable 2017.
1. Statistical data analysis
This might sound like something very complicated, but once you start learning it online, you will see that you were wrong. Besides business owners, students can benefit from acquiring this skill too. There are many software solutions for this type of analysis and it is up to you to master these programs. In this way, you can make better market shares predictions, analyze profit tendencies, and do other things that will improve productivity.
Now here’s another skill that is great for business. As you are probably aware, almost every modern business is looking for a way to be presented online and websites are still the most wanted form of presentation on the World Wide Web. There are many websites that provide online courses and tutorials that can help you become a good web designer. (2)
3. Fashion design
This might not be the favorite choice for everyone, but the truth is that this skill can help you make this year more profitable and more productive. Clothes are one of the basic items in the lives of almost every individual. This means that people will always buy clothes. Use online videos found on video-sharing websites and websites where you can get step-by-step guides related to fashion design and how to draw the perfect piece of clothing.
Business research is a broad term which usually involves things like researching a few businesses in one industry or researching the structure of business for investments or presentation. If you conduct some research you will notice that there are many online articles and videos related to business research that can help you.
Did you know that this is one of the fastest-growing businesses today? If you are prepared to start a new business, you might take this skill into account. Obviously, the best way to master this skill is to watch videos and to visit websites that have articles with many how-to images.
6.Run a blog
Finally, it’s a smart move to master the art of creating and running a blog. With the help of a blog, you can showcase your work and skills and establish yourself as an authority. Choose the form of your blog and the things you share on this blog wisely.
Follow these timeless tips for acquiring useful skills over the Internet for a successful 2017.
Celebrities are rarely off the field as good as they are on the field there are some rare exceptions as they mentioned in the article, but as a business celebrity endorsements are very challenging. There are most useful for a brand in the early going to help build credibility and a line with the company’s goals and values. On a long-term basis though, the same celebrity that help you grow the business Will Poulter as all humans do, and you need to make sure that their discussions or mistakes will not be damaging to your company. Also, companies need to make sure that they don’t overreact when it comes to there celebrity endorsers mistakes. There are some times when you can stick by your celebrity endorser but beware as in the case of our Olympian, he did make a big mistake, and although he is remorseful about it, there are some lessons that need to come out of it. Hopefully, the brands that endorse Ryan can use this as a learning opportunity for their customers to show how one person can make a mistake, but how they overcome that mistake and not just by being the person in obscurity until everybody has forgotten about the discretion. The fragile relationship between celebrities and businesses continue 🙂
The situation in Puerto Rico is dire, but not unique nor uncommon. We are seeing some of the same challenges in eastern European countries. What Puerto Rico needs is a pivot. I disagree that this change and the new legislation will take years to take effect. If you were to announce entrepreneurial benefits to this new program, business owners would jump in immediately. There would be no lag! With the stronger dollar, business process outsourcing, call center services, manufacturing, administrative virtual assistance, and other support functions would happen almost immediately. Lowering the minimum wage is one step, and a tough one, that was necessary so businesses have lower costs to operate. Investment in the Commonwealth as well as consumption will increase quickly if the incentives are there for the business community to do so. Legislation is not enough, let’s put the incentives in there to compel business owners to invest in the Commonwealth. That will in turn lead to further investment domestically.
Writing a business plan is essential, and highly recommended. Why? In the 7 Stages of Business Success (www.The7StagesOfSmallBusinessSuccess.com) , Stage 1 is titled strategic planning… where you get your great ideas out of your head and onto paper. However, it is not enough to share what you are doing… and what you intend to do in your business. The implication of your strategic planning is that it is compelling and inspiring. You need to compel the marketplace to partner with you, and your business plan must inspire others to want to work for you. The HOW of what you do and the WHY of what you do …matter. The HOW is your approach to business, your differentiator and what makes you better. Your WHY is important because it will articulate what impact you are going to have on the world beyond just your product and service. Does your strategic planning answer these two questions?… 1. Why would somebody move from their current location to work for you; and be willing to do it at a discount? …. 2. Why would a consumer choose to leave their current provider, and be willing to purchase from me and pay a premium? If you can answer those 2 questions successfully in your strategic planning documents, then you have created an inspiring and compelling business plan!
When are they going to realized that you cannot manipulate the market forever? The Middle East dominance of the oil Market has come to an end… they are (understandably) desperately trying to hold on to their market share. Manufacturers all around the world have found more efficient ways to consume oil, and other alternatives fuel sources to the point that oil reserves are not nearly as important as they once were. Every business faces this dilemma (if it’s lucky!) when a brand or a product moves beyond the peak of its life cycle, or the patent expires, or its significant competitive advantage is removed. If you are a business that is in anyway related to the oil and gas industry, there is a new paradigm. You no longer have a license to print money… you’ll now have to go out and fight for your customers, and, like the rest of us!