As a business strategist, over the last 10 years I have asked business founders what the reasons were for starting their business. A combination of the following is common:
- An underserved need that is not currently being met in the market
- Deliver a service more effectively and or efficiently.
- More autonomy
- A different way of building wealth
- See something in the world that does not exist
This motivation added to the drive for financial security, forms the basis of an early-stage owner’s vision. It tends to be very short term for good reason. As the business gains more financial security and the stakeholders of the business grow, the owners vision evolves. However, very few SME owners are truly conscious of their vision or its evolution. Also, it is rare for the SME owner to have any document that describes this vision. I acknowledge there is a lot of business jargon and noise about business visions. However, in the case of an SME owner, it is simply a term to describe what they want their business to deliver. A challenge of not being clear of your vision is the impact on decision making – it can become too short term.
I recently worked with an SME owner whom I will call John. John’s business is very successful from both a cultural and financial perspective. He received an offer that on the surface seemed like a good offer. After supporting him to draft his owner’s vision, it became clear how poor the offer was. By doing John’s vision we discovered that he has very specific criteria that needs to be met for him to sell. In fact, because he wants to build other SMEs, retaining this business will provide leadership development and funding to fuel the expansion. Johns’ situation is an example of the need for guardrails to reduce the risk of reactive decision making. If John had accepted this offer, he would most likely suffer from sellers’ remorse.
What does long term mean in an SME?
I recognise ‘long-term’ is a highly subjective expression. In the context of an SME, the roles being done by the owner demand different time horizons and help make sense of the difference between short term and long term. The SME owner as an operational worker; tends to be short term. Selling or delivering the offering of the business for instance. Even a person that is leading others in the operations of the business, deal with issues that are measured hours, days and weeks in length. Roles that require a long-term approach are organisation leader and owner. An organisation leader will form and implement strategies which have impact over quarters and years. Finally, the owner makes decisions about the vision and the capital of the business. They tend to be very long term.
The SME Owner usually has all these roles and the most demanding are the operational roles. The owner does not have the time to do the work as an organisation leader or in the role of owner.
What is your vision now?
Executing the role as owner you need to declare what you want the business to deliver in service of your own aspirations. Questions like:
- How much time do I want to spend working?
- How do I integrate my family and other interests into my life?
- Do I want to sell my business? If so when and how?
- Do I want to keep the business and build for the long term?
- What sort of work do I enjoy? What roles in the business do I want to do?
- If I want to scale/grow what will my part be and in what roles?
- What do I want for our people?
- What do I want for our customers?
- What are the possibilities for future ownership?
- What values are critical as cultural guardrails for the business?
These questions are all about stakeholders of your business where you (and your family) are considered as a stakeholder. If you have not considered answers to these questions, It is my discovery (also supported in research AICD article) that many SME owners end up in place they don’t want to be.
The process of documenting your owners vision leads to many other discoveries. What are the possibilities for succession of ownership. Many owners think the only option is to sell the business. However, building a family, employee, leader or stakeholder owned business are all feasible ideas. Doing the learning about these expands the possibilities of what the vision for the business can be.
I recommend giving yourself the time to make sense of what you want your business to deliver. The questions are the starting point to positive change. By engaging in the journaling of responses to these questions you will build the basis for your current vision.
Written by Bill Withers.
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