Over the past 6 months, we have interviewed close to 50 of WA’s most successful business owners to gather research and insight into how this unique group of people think about a range of different issues.
The research is for a project we have undertaken to understand better what has led to their business’s successes, personal lives, and personal finances. Over time, this research will be collated and shared with the wider business community and hopefully making us better advisers along the journey.
The interviews have yielded many unique, positive insights that have contributed to the success of these business owners that have been generously shared. I am also amazed at some of the challenges and fears that many people still face. It reminds me that everyone ‘puts their pants on one leg at a time’ and that a significant amount of wealth can sometimes be a burden as much as it can help lift you, and the people around you, up.
Whilst there is no ‘secret sauce’ to running a successful business, in this article, I will share some key themes around how these business owners have been able to increase the value of the business and extract wealth.
1. Always have the business prepared for sale.
It was clear that almost all successful business owners increased value and gained personal freedom through having structure. This is nicely captured through the concept of always having your business prepared for sale. The most successful business owners we talked to were either working towards or had in place:
- Clear systems and processes.
- An efficient team and management structure
- Low level of reliance on the business owner or, if they enjoyed working in the business day to day in a leadership role, a clear succession plan for their role.
- A clean set of accounting and financials with traffic light indicators around the key metrics.
- Thought put into the succession of the business.
2. Never stop innovating
In this day and age, the rate of change and potential disruption in any industry is growing exponentially. The most successful business owners recognise this and are always looking to, and investing in, the future. They are never satisfied with the status quo. They regularly travel to trade shows (or have built national/international networks) to understand global trends and the best way to do business.
They are also very clear that their margins and the value of the business is highly dependent on their key differentiators relative to the marketplace and ruthlessly protect their competitive advantage.
3. Surround yourself with mentors and coaches
It can be lonely at the top. Ultimately the buck stops with you on all the key decisions. As a result, business owners often feel a strong sense of responsibility for their own family and their employees and their families.
The most successful business owners understood that no one can succeed alone and had a small network of highly capable and trusted mentors (within the industry and external) that acted as sounding boards and wise counsel. These were usually friends, business coaches or collaborative groups like TEC, CEO Institute or EO.
Almost every business owner reflected on mentors or coaches that exposed them to different ideas and challenged them to help take their business to the next level.
4. Never forget that the business works for you
It is easy to see your business like ‘your baby’. This usually shows up through absolute commitment to the cause that consumes your time, money, relationships and is responsible for your sense of purpose in life. The feedback and reflections we have received from business owners are:
- Time – make sure you balance your time in the business with time for family, friends and yourself;
- Money – it is easy to keep reinvesting and seeking out ways to grow the business. However, you need to balance this against your family goals and wealth. Make sure you pay yourself properly and take money out of the business to secure your family’s future. Any business can be disrupted or go through a rough period, so don’t rely on a business sale to achieve your personal goals.
- Relationships – make sure you balance relationships within and outside of the business. Make time for family and friends, so you don’t have any regrets.
- Purpose – the business will always be an important part of your life. However, if you don’t find hobbies and have a community/network outside of this, life will be a challenge when you eventually have a succession event.
In many ways, these strategies are common sense. However, the value is always in the clarity to focus on living your best life and committing your ideas.
Feel free to be added to our email list sharing our findings with the business community, or contact me if you would like to be interviewed and share your story.