Do Business Well

Another important aspect of the change in your company from survival oriented to management oriented is the way in which you establish goals and monitor them. The following questions are designed to take you through a process of developing a new set of goals for your company:

1. What do you want the company to do for you in the next twenty years? Ten years? Five years? Twelve months? Are you primarily interested in the income stream that can be generated? Is wealth building as opposed to income generation your most important desire? Possibly you’d prefer a lighter work schedule, even if it meant less income. Will you be happy if you aren’t growing? Is it a high priority for you to broaden markets?

Once upon a time, not too many years ago, my partner and I were talking about our plan for 1992. Before we got too far along in the conversation I mentioned that while we’d experienced 50 percent per year average growth for six straight years, it wouldn’t bother me in the least if we had no growth at all in ‘92. I maintainedthat it would be a welcome breather and an opportunity to sharpen our skills in every area. I further predicted that we could expect substantial gains in profit through a planned year of no, or almost no, growth.

Just two years before we’d both opted for trying to triple our sales in five years. The lesson here is that goals should never be set with the idea that they exist in concrete. Circumstances change. Markets change. You’ll change. Be prepared to rethink your long term company (and personal) goals often.

2. What are your customers looking for from your company? Will they be satisfied to see you slow down? Are they more interested in your service level, your innovation, your prices, or your steadiness? If you change their perception of what your company is or does, will it leave the door open for another company to fill your niche?

An associate of mine was a photographer. He maintained a studio with a fairly prestigious address (and rent to match). For twenty years he’d offered a full range of services directed primarily at families. He became bored with doing weddings, family portraits, and the like, so he decided to try to develop a more commercially oriented clientele. He continued to do portraits, but stopped taking weddings.

Within three years of this decision, he was losing money and couldn’t figure out why. He’d developed some commercial business, but his portrait business had totally dried up. In analyzing the situation with him, we determined that the portrait business was an outgrowth of the wedding trade. You have to have a photographer for your wedding. Therefore, unless you already know someone, you’ll seek out a new supplier for this service. It’s commonly your first encounter with a professional photographer as an adult.

If you’re happy with the result, you’ll likely return to this professional for your kids’ pictures, your parents’ twenty-fifth anniversary, a portrait of you and your wife for your parents, and so on. By altering his plan, it was as if his studio had become a new start-up business, not just a variation on the old theme.

As noted above, my partner and I might be willing to slow down. However, it’s not uncommon for customer pressures to keep that from happening. Unless we just stop making presentations, it’s likely that our existing customers will add items from us that they’re not now carrying. Some of you may be saying: “Gee, I’d like to have some of that bad luck.” Unfortunately, there are times when pressure for growth can indeed create substantial difficulties for a company.

1. What do your top managers expect from the company? Will a change in direction result in the loss of important employees? Worse yet, will such a change result in your management team losing enthusiasm while they stay on board and collect big paychecks?

Your employees can create even greater pressure on your direction than your customers. You may be excited about a new joint venture in a related field that you believe will add substantially to the power and financial strength of the company. No matter how you explain this to your employees, though, they may see this new move as a threat to their territory, an unwise use of corporate assets, or a breach of personal loyalty.

Another possibility is that you make the decision to rapidly increase the sales of the company. It’s very likely that some of your staff who were very capable of handling their responsibilities when sales were at the $500,000 level, may be quite over their head at $2 million. Some may be very comfortable in an office that has three or four employees, and feel quite lost and alone in one that has twelve.

1. Step outside the office environment for a moment. Let’s talk about your home life. What have you been telling your wife, kids, and friends? Are you willing to explain your new direction to them? If you’re thinking of shifting into high gear again, does this mean less time at home, and a similar upward shift in financial risk and strain? Are the rewards that you hope to gain worth the price that must be paid?

If you’re thinking of slowing things down, will this affect the financial plans that others have been counting on? Will it mean the new house is out of the question? Will you now have time for the annual vacation, but no funds? Will it mean less help for your daughter’s first year in college?

The above two paragraphs are not intended in any way to exert a moral pressure. The idea of this set of questions is to merely present the questions you may not be considering.

With these four sets of issues in mind, you should fully consider your long term goals once again. In twenty years I would like to I It may take more prodding at this point in your career to get you to go through the evaluation process, since you’ll have a fear of fiddling with success. This fear probably won’t keep youfrom making adjustments in the company plans from year to year or month to month. But it will make it harder to think about possiblefundamental changes in your life.

Take my advice: Go through the evaluation process. It’s likelythat you’re already moving down the best road for you. However, your thoughtful trip into your deepest feelings will provide you with substantial extra enthusiasm, direction, and focus for your quest.

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