Confessions of a Business Owner —
What I Did During My Summer Vacation

By

Joan M. Ridley, CFP™, CEPA

A slow market is not necessarily a bad thing. It’s all a matter of your perspective, resources, preparedness, and frame of mind. Here is a list of things you might have done this summer.

How you spent your time, and money, is some indication of your priorities and resources.

Took it Easy

The first three items on the list are not a bad idea for business owners who made plenty of money when times were good. This might have been a good way to spend your time if your business is so wellestablished that you can count on customers and clients being totally loyal when the market recovers. Chances are you need to take a break when you can, especially if you are in a very cyclical or transactional business. Once the market recovers, you will be working 24/7.

Looked for Money

If you were blind-sided by this downturn and ran out of cash to fund projects or capital to run your business, number four might be how you spent your time. The good news is that there are investors looking for opportunities. Be prepared to share, sometimes substantial, ownership. Take heart. The right investor could offer needed skills and an up-side potential not previously available to you, especially as we head into a recovery.

Re-set Your Direction

Chances are you already had some semblance of a strategic business plan, but maybe it needs to be updated. A well thought out business plan requires quiet time to think, reflect, research, and write. Once written, you will have time to carefully implement it. I am not referring to a plan that you purchase on the internet. A plan that will work best for you is one that is custom written just for you and your business by an experienced consultant who will ask you the tough questions and keep digging until the most credible information surfaces. Keep in mind that writing a strategic business plan is a journey. The written document is simply a journal with supporting documentation and a wellresearched roadmap for the route you plan to travel. The reason you go through this exercise with a guide is to ensure that your plan is viable and likely to take you to your destination. If you are looking for an investor, lender, or eventually a buyer, this plan, or a plan for funding derived from it, will add to your credibility and reduce the other party’s perceived risk. Less risk translates into greater enterprise value.

Decided Who Stays and Who Goes

Perhaps you reviewed and updated your strategic business plan and then assessed your people. After considerable thought perhaps you determine who adds real value to your enterprise and who you would want your competition to hire. After evaluating your people based on value, and not cost, perhaps you decided who should stay and who should go. There has been, and still is, considerable talent in the marketplace searching for new opportunities. If you referred back to your strategic business plan, hopefully it provided an excellent guide about whom to hire and how to compensate and retain that person, even after you are gone.

Negotiated Better Space for Less

If you were needing new office space, this has been an ideal time to look around to see what is available and negotiate favorable terms with a new landlord. Perhaps you considered retaining a professional who represents tenants to help you evaluate your need for space. That professional could then negotiate the best terms on your behalf, including the non-financial aspects of the agreement.

Boosted Profitability

Perhaps you took a look at how you run your operation. After you re-wrote your strategic business plan, and while you were thinking about letting the less valuable people go, you could have consulted with a professional whose focus is to increase your profits. This continues to be an excellent time to look around for just the right person to help you with this project. If you can improve profits now in this economy, just think about how profitable you will be when good times return.

Kept Marketing

Marketing is a direct off-shoot of your strategic business plan. And, it is something you do even when times are tough. In fact, today’s economy is an ideal environment to revisit, revise, and implement your marketing plan, collateral material, and website. This uncrowded marketplace is ideal for getting your message out there when your target audience has time to pay attention to your message, and when your competition has decided to take a break. Also, you might receive better than the usual excellent service from your marketing firm because so many have temporarily cut marketing out of their budget.

Took Control - Created a Plan for the Inevitable and the Unknown

How up-to-date is your estate plan? Even if it was designed, drafted, and executed within the last two years, this would be a good time to revisit it. There are changes coming that could cost you millions of dollars, especially if your plan is not properly drafted and properly executed. Now is the time to take advantage of low tax rates (gift, estate, and ordinary income) and low valuations. Speak with your wealth advisor or financial planner. He or she can educate you about your options and all the attendant terminology before you meet with your attorney to draft the documents. Such a trusted advisor can help you think through the personal decisions that you will need to make before you begin to draft the legal documents. This can save you considerable legal fees.

Get Ready for the Inevitable

The market will recover. Take stock of your situation and start preparing. You won’t want to miss out. Get help. Your trusted advisors who are invested in your success want to help you succeed.

 

Joan M. Ridley is president of Business Wealth Solutions, a Dallas-based advisory firm that consults with business owners about how to successfully grow and leave their business. Visit our website at www.bwsllc.net. Call us today at 214.692.9192 for a complimentary meeting to learn how we can help you get where you want to go.

Copyright 2009 Joan M. Ridley