Is Your Business Vision 2020?
We have all heard it said that hindsight is 2020, but for business we need our foresight to also be 2020. As we come into this new year, is your vision for your business 2020 in clarity? Below we have provided a short list of some thought provoking discussion points to help exam your vision for the coming year. We have prepared this list based on best practices I have gleaned from over 25 years of working with businesses and ongoing research sources like Harvard's Advanced Strategy program I recently attended. I am confident there is something in here for every business owner.
Owner/Shareholder Vision - Have you clearly defined your personal vision? In other words, have you clearly identified and quantified what you personally hope to achieve for yourself from the business. This should include defining your ideal exit strategy including timing, targeted valuation. It should include identifying your ideal role with the company currently and following any planned exit. If these things are not clearly defined, the business vision, by extension, cannot be clear. In the words of Yogi Berra: "If you don't know where you are going, you'll end up some place else.".
Shareholder and Business Vision Alignment - Have you clearly aligned the shareholder and business visions? If these are not aligned, the business will be effectively like a ship without a rudder, that is easily tossed about by any change in wind or weather, or bright shiny object. Ultimately, this creates a high risk that the shareholder will not achieve desired objectives. It also creates volatility in a business that can negatively impact your ability to attract and retain the right people. Additionally, if the vision is not clear, it becomes fundamentally impossible to scale the organization, because you do not have a basis to evaluate the best use of the company's time and resources. It is also important to remember that having past success with your product or service offering, does not guarantee future success.
Strategic Planning and Analysis - Strategic planning is not a static process that results in a dusty document on a shelf. It is an iterative process that should continually evaluate your businesses' ability to achieve its' vision in light of the ever changing market conditions. As noted above, and in every investment prospectus, past success is not a guarantee of future performance. At the core of strategic planning is the following question: As we go forward, can we maintain our competitive advantage, or in other words, the things that have enabled us to succeed. Conversely, if the business is not succeeding, asking how we have we failed to maintain a competitive advantage and what can we do reestablish it? These questions, when properly examined, require a business to evaluate not just its product and the external market forces, but everything that goes into delivering that product. In order to effectively evaluate and update strategy, we have to look at whether all facets of the business are properly aligned to support success, including: leadership style, people, processes, systems, suppliers, and capital structure. Take time to assess if any of these factors not fully aligned with your strategy and vision or may have the risk of becoming an issue. Taking both external and internal factors into consideration will allow you to build a strategy that best ensures your chances of success.
Forecasting and Capital - As you go through your annual forecasting process, have you thoroughly evaluated whether your capital structure supports your vision? By supporting your vision we are not speaking of simply funding your ongoing operations. As part of your strategy assessment, every business should evaluate, both what capital is needed to sustain the business, but also, what the business could do if capital was not a limiting factor. Put another way, if we could access whatever capital we wanted, would it help us to accelerate or enhance our business strategy? If so, you should take a deeper look at your capital structure and the question of what raising additional capital could do to support your vision. There is never been a better time in history to raise capital. There is more capital available to businesses than ever before. Additionally, the diversity of capital structures has never been greater. What this means is that a business owner does not necessarily have to give up control of the business to raise capital, if that is not part of the strategy. As such, this should be a critical part of any strategy planning you undertake.
Shareholder Personal Checkup - While we mention this last, it is not in order of importance. This should in fact come before the first step in your business planning, Before you tackle defining your shareholder vision for the business, take time to evaluate your personal needs. Do you have a personal plan address your physical, intellectual, emotional, and spiritual needs? Do your plans include assessing what is best for your personal relationships? If the answer is no to any of the above, we would suggest starting with those things before starting your business planning. As author Matthew Kelly explains in his book the The Rhythm of Life, if any one of these things is left unattended it will eventually throw the remaining elements out of balance. Make this the first step and it will greatly assist in the development of the best shareholder vision and everything else that follows.
I pray you and your business will have an exceptional 2020! If I can assist you in any way with your planning, execution or capital needs, please reach out to me at firstname.lastname@example.org and lets start a conversation. Thank you and Happy New Year!