Here are my top five mistakes preventing business owners from realizing the maximum value from their businesses.
Mistake Five: Not delegating. Owners who do not delegate complain of spending too much time at their business without results. Frequently these owners also complain about the difficulty of finding capable employees. Most owners are really good at something when they start their businesses. If they don't transition from being doers to managers, their businesses do not growth and they burn out. When times are tough, these owners lay off employees and do even more of the work themselves. Years later they wonder why there business has not grown.
Mistake Four: Not preparing the business for sale as it is managed. Businesses managed with shortcut techniques, which delay system upgrades and maintenance cannot readily be remodeled. Businesses with dysfunctional accounting or inadequate legal maintenance are marketable only at a severe discount.
Mistake Three: Not having a written business plan. The essence of the business plan is accurate market information which identifies reasonable business revenue goals. These goals should be the basis for the operation plan of the business formed by the executive officers. If these goals are not in place, the business will have no direction and growth will be serendipitous. The plan goals should include having the business sold within five years.
Mistake Two: Not having a succession plan, which includes provisions for a sudden absence of an executive officer (contingency plan) and a long-term plan (transition plan) addressing transition of the ownership of the business. In an owner-managed business, this is the provision for executive succession. The presence of a succession system for the executive leadership of a company will enforce its stability and capability.
Mistake One: Failure to implement a system of making wise decisions both in the business and family arenas. Wise leaders understand the importance of establishing a decision-making process and making the decision-making process transparent, ongoing, and accessible to the stakeholders. Symptoms of this problem are when no written record of decisions made exists and stakeholders complain about not knowing what is happening.
