“Getting distracted is the biggest problem entrepreneur’s face.” – Gordon Segal, founder & CEO of Crate & Barrel
A business leader will typically encounter various types of activities when running their business. At B2B CFO®, we categorize these activities into three distinct functions – Finder, Minders and Grinders™.
A Finder is someone that is typically described as a visionary, idea generator, innovator or dreamer, catalyst for future change, or relationship builder. All of these descriptions indicate someone that is future driven – or as I like to say to my clients – 3 years ahead.
A Minder is the administrative, accounting and operational staff of the company. Minders are historians – they are looking backward.
A Grinder is someone that does the physical work of the company. A grinder could be a line worker or lathe operator – they work for today and are not concerned about the future or the past.
Once the complexities of executing an exit plan kick off, the general tendency of an owner is to get involved in the details of the transaction – from gathering documents, to data crunching to reviewing legal documents. All these items are considered to be grinding activities. Not only are there people out there that specialize in these areas, the distraction of these details takes the leader’s focus away from driving the business and adding value. The following chart highlights what could happen if this is allowed to continue – resulting in a reduction of value and sales price.
An important element of an exit strategy is the formation of a team of advisors we like to call The Success Team™. The Success Team™ usually consists of the business owner, the team manager (B2B CFO® partner), M&A professional, attorney, tax specialist, auditor, wealth manager, insurance advisor, banker and other specialties as needed. This team is lead by the business owner but managed by the team manager – allowing the owner to continue to increase value of the business.
How do you avoid these distractions? A few thoughts:
- Delegate as much as possible to The Success Team™
- Hold the individual members of The Success Team™ accountable
- Fire and replace unproductive members of The Success Team™
- Work as if the sales transaction will fall through
- Work up to the day of the close
- Remain the innovator, the dreamer, the visionary and the idea generator
- Try to keep your Finding activities to 70% or more of your time
- Set realistic goals and start the process to achieve those goals
- Ask a trusted advisor to immediately tell you if they feel you are getting too distracted
- Never quit
Your business is most likely the highest valued asset in your portfolio – keeping your eyes on the prize will result in an increase in value while implementing your exit strategy. A double bonus!