Is it possible that things were going so well that we all got spoiled and perhaps even complacent? Perhaps we did not have to work as hard to get the sales. Maybe we did not have to be so service oriented as there was enough to go around.
One may or may not agree, but, the reality is that we were in a whirlwind economic environment where things were literally out of control.
There was too much uncontrolled spending, and irrational decision-making not only on the part of those worldwide who lead us into the storm, but also within Canada, and on the opposite end, ourselves. That said, here in BC, I believe we are likely still sitting in the best place of all where the economic effects have not been and likely will not be as severe as some in other provinces and countries.
We are currently going through what I call a “cleansing” of sorts. It is a time when those who do their job well, will excel and those who don’t, won’t. It’s a cleanup. It is not “survival of the fittest” but “survival of the best!”
The question is, “What does that mean and how does it all relate to us all?”
I see it as an opportunity; An opportunity to excel!; To be better than we have ever been and certainly, better than our competition. It means we need to be better than we have ever been, at doing our job!
We need to continue to further educate ourselves in order to be of more value to our clients. One needs to be more business knowledgeable since most Small to Mid Sized Enterprise owners tend to know the technical side of the business and lack some of the business, financial, managerial or marketing skills. One needs to have better products and or services, (not necessarily more expensive) be more client and service oriented, more concerned and understanding of one’s clients’ needs, and simply put, do a better job that we have ever done before. Quality is key, not quantity!
We also need to be more efficient and increase that bottom line. Decrease unnecessary spending and increase cash flow and focus on the value drivers of the business to drive the value up. Doing a better job is the difference that Mr. Jim Collins talks about in his book “Good to Great” which I highly recommend you read.
If your business is “cash” rich, this may be a good time to grow by acquisition by purchasing a synergistic or strategic company. If an individual is flush with cash, what better place to invest ones’ money, than a cash producing business. This is a good time to buy a business! It is always a good time to buy a good business.
Financial institutions have tightened up their lending so leveraging may be a little different than in the past, but they are still lending for a good business purchase. The key is good sustainable cash flow, financial depth of the buyer, security and business growth opportunity. As a buyer, you should have a realistic business plan in place, and please, don’t forget your exit strategy. Some leverage is often also available from the Vendor via a note. This is more critical to have today than ever before since the lending criteria of traditional financing channels has tightened.
When it comes to divesting yourself of your business, this is also still a good time. Good buyers are out there, and though many think that values have dropped, they really have not. The ones that were inflated to begin with did, but a good business that was properly and realistically valued a year ago, arguably, still have the same value today.
It is always a good time to sell if the business is a “good business,” realistically valued and priced, and where there is a demand for that business. Certainly one can command a premium when there is competition and times are booming but, it is through that inflation of values and frenzy, that we all got into the current trouble we are in. So I think prices are now more realistic, and more stable. For the serious sellers, yes, this is a good time to exit.
Good clients, and customers, good buyers and sellers are still out there! Ultimately, however, during these times we all have to be more resilient and more proficient at whatever we do.
The pool just got smaller since “the qualifying bar was recently raised!” Remember that the difference between those that succeed and those that don’t is that those that succeed, do the things that those that don’t, are not willing or able to do.
The difference between NOW and THEN is that now, we need to be that much more willing and able and better at it.