The past is never dead. It's not even past.
- by William Faulkner
A vexing challenge in attaining a business breakthrough of any type - sales, profitability, business model, company culture - is the inexorable "backward" pull of a business' historical results and accomplishments (or lack thereof).
For sure, as effective executives, we know to focus on opportunities not problems and that past performance, good or bad, is neither indicative nor predictive of future results, yet...
...whether we like it or not we are reminded always of what has gone before, with the “unsaid” being that no matter how hard we try, the future of our business will be more or less like its past, with the best we can realistically hope for is just a few percentage points of growth here and there.
This frustrating reality is caused, to a very large degree, by the day-to-day operational “inertia” of most businesses, big and small.
It is the inertia that develops when the same people interact with each other in the same way - managing meetings, running projects, and assigning to-dos in that default and “comfortable” way.
Over time, individual executives start bringing to these repetitive business interactions increasingly hardened perspectives.
And then this inertia turns to a creeping lethargy that stops a business in its tracks, especially when opportunities that require proactive action to pursue present themselves.
Now I hope that just by describing the problem sheds light on how to solve it: Consciously and constantly injecting into a business new, different, and extraordinary stimuli.
The stimuli of Organizational Change - bringing new people in and encouraging under performers to depart.
The stimuli of Branding Change - ditching the old logo, tagline and website and starting over new and fresh.
The stimuli of Financial Change - seeking and securing investment capital to grow faster and more strategically.
Heck, just contemplating new stimuli like these can be a breath of badly needed fresh air - forcing executives to visualize and imagine what their desired business of the future should and can be...
...and then working back to the present time to define what needs to be done to get it there.
Yes, when it comes to breaking the shackles of the past, the default strategic stance should be that new and different is always better until and unless proven otherwise.
I wouldn't worry too much about whether this approach will lead to poorly considered risk-taking.
Because whether we like it or not, our businesses’ pasts are always with us.
But by taking conscious, definitive, and different action - repeatedly and determinedly - we can easily break free of it.
I recently moderated a strategic planning session for a Texas-based developer and distributor of specialty software for the financial services industry.
For them, on the one hand it was truly the best of times: an 8 - figure revenue base and possessing of a recurring revenue business model with long term clients including some of the biggest banks and brokerage firms in the world.
But...and like many companies now in our technology fast forwarded world, serious storm clouds threatened: minimal revenue growth and more disturbingly pricing (and margins) driven down by aggressive overseas competition.
As concerning, the Company’s Founder - rightly revered for his work ethic and charismatic leadership - was uncharacteristically indecisive, waxing on a bit too nostalgically on how “easy” business was in the “old days” versus addressing today’s challenges.
So we got “stuck,” so that even in the areas where there was agreement as to the strategic and tactical changes needing to be made, the executive team just couldn’t make them (and then have those decisions stay made!).
Now, as I have found from my 15+ years of leading strategic sessions like this, at some point as often as not they turn into Interventions, defined by Webster as “becoming involved intentionally in a difficult situation in order to change it or improve it, or prevent it from getting worse.”
And, in the context of a company refining its strategic plan, the intervention (at a top level) normally involves leading the executive team through a series of “Why,” “What,” “Who” questions.
First, there are the “why” questions to re-ground us in the business’ “reason for being” and the fundamental values it brings to its stakeholders - shareholders, customers, employees, etc.
Questions like “Why do customers choose us?” and more poignantly for the team “Why do we work here?" and "Why is it important to us as individuals that this company be successful?”
As these “whys” are grappled with, strategic clarity usually emerges and the questions turn to “Whats” - to tactics, projects, deadlines, and to-dos.
As this point, everyone (finally!) starts “getting real” with each other, to who is responsible for what and more to the point is there really an accountability-based culture in place to promote and sustain high performance and positive change?
As these exercises proceed, what normally re-awakens is the understanding that the leadership team’s responsibility is to the organization as a whole, and not to any one particular individual, division, or practice area.
In this company’s case, from these exercises the hard decision was made to transition a pair of executives, as they embodied a legacy mindset and approach unsuited for the “business of the future” needed to be built.
And, as is more often the case than not, these transition conversations were more difficult in their anticipation than actuality, and as they were completed a new forward looking-energy and initiative was unleashed in the team members that remained.
I would encourage any business that feels “stuck” in any important aspect - revenue growth, cash flow, client satisfaction, culturally - to prompt a business intervention like this.
Yes, the outcomes will sometimes be difficult for specific individuals, but almost always beneficial for the organization as a whole.
People ask me what I do in winter when there's no baseball. I'll tell you what I do. I stare out the window and wait for spring. - Rogers Hornsby
One of the real privileges and joys of my life is coaching my eight and nine-year old sons' various youth sports teams.
And with springtime that means Little League Baseball.
This Saturday was a particular delight, as after playing our game, I took my sons and a few of their teammates to watch an exhibition game between a local traveling team and an all-star team from Tokyo, Japan.
These Tokyo youngsters were not just any team, as last summer they won the famed Little League Series, prevailing in a 16-team tournament that started with over 30,000 teams from 75 countries.
Watching youth baseball at any level is a treat, but the team spirit, precision, and respect with which the Japanese kids played the game was mesmerizing.
And for those that subscribe to the view that the "American Way" has come too much to mean "everyone gets a pat on the back and an attaboy for trying” - with a deleterious impact on our competitive drive - well then the contrasting styles (and results) between the American and Japanese teams were proof positive for that view.
A few vignettes:
- After each inning, the Japanese youngsters would sprint off the field into an attentive semi-circle around their coach, remove their hats as a show of respect, and stand quietly with eyes up as their coach instructed them for the inning to come.
- While, when their teammates were at the plate, the American players too often sat and chatted in their dugout, the Japanese players were on their feet, attentive and cheering.
- When an umpire called a close play against them, there was no eye-rolling, no demonstrative shoulder shrugging, only a fast hustle back to the dugout.
- At the end of the game, the Japanese players went to each section of the crowd and collectively bowed and thanked the spectators for attending and cheering.
- And my favorite as a beleaguered youth coach constantly searching for lost gloves, hats, and gear from my notoriously absent-minded players, all of the Japanese players' was exactingly lined up, cleanly packed, with a stray ball nowhere in sight.
- Perhaps a bit more controversially, when one of the Japanese players made an error (remember these are 11 and 12 year old boys!) instead of a "get the next one" as would be typical for an American coach, from the dugout came a roar and that player sprinted off the field, replaced and not seen for the remainder of the game.
Yes, here was a team that played the game with hustle, teamwork, respect, and an awesome will to win.
And well beyond baseball, isn’t that the kind of team that any manager in any field of endeavor would be thrilled and honored to lead?
And wouldn’t that be a team - just like those Japanese boys vanquishing 30,000+ teams on their way to a championship - that would just crush the competition?
Yes, this is of more than just passing cultural interest, as in our modern market the consequences of weak performance come harsh and fast - talented global competitors ready and eager to pick off dissatisfied customers, flaming online reviews diminishing reputations and brands, margins squeezed from above by customers unwilling to pay much for mediocre experiences, and from below by a fatness encouraged by a usually defended as virtuous managerial "light-handedness."
Please let me stop and stress that this is not a “Fuddy-Duddy” formulation, blaming the "kids" for all the ills of the world.
Having now coached a lot of American children and managed as many American young people, I assure you they all want and respond well to expectations of hard work, decorum, and measurable, concrete results.
No, it is the leaders and managers of organizations that need to do the daily hard and energetic work of setting team and individual objectives, of rewarding great performance and setting consequences for results that are lacking.
The great news is that not only does a higher accountability, "tough love" culture like this lead to better results (of course), not only is it more respectable to all the stakeholders of an organization, but...
...it also creates the best kind of fun.
The nutritious fun of working hard toward a goal and accomplishing it.
Of delivering more and more “low cost, high quality” value to customers.
And just like those Japanese baseball players, the fun of winning in the places that matter most, on the scoreboard and on the bottom line.
The fox knows many things, but a hedgehog knows one big thing.
- Ancient Greek Aphorism
Isaiah Berlin, in 1953, famously referenced this as a jumping off point for an essay on the relative importance of two kinds of knowledge, on the one hand that of principles and ideas, and on the other hand that of "ways of the world," street smarts, and technique.
I was reminded of it recently by an old and wise colleague, as we were evaluating an investment opportunity, and the relative importance of the executive team’s operating experience versus their big picture strategy and growth model for the business.
His point was that while those executives were certainly “foxes” - great resumes, hard workers, and excellent communicators - they were lacking as “hedgehogs,” pursuing an inefficient and difficult to scale business model.
We passed on the investment.
And it occurred to me how so many of us think and work like them - tens of millions of knowledge workers all over the world that know and do a lot of “little” things - how to code, talk, email, text, post, and tweet, but how too often doing so crowds out the "Deep Work" necessary to arrive at and execute upon business models that scale.
Perhaps the most vexing "focus" challenge of modern business, but for the disciplined executive one surprisingly easy-to-overcome through asking one simple question:
Does a particular bucket of stuff really make me and my company money or does it not?
Because focusing on making money almost always means focusing less on:
And more on:
And when we reflect on it, isn't this not just the stuff that makes us money, but is also the stuff we almost always enjoy and find the most fulfilling?
Isaiah Berlin's full "The Hedgehog and the Fox" essay can be read here.
Timeless, ancient wisdom worth applying to our frenetic, modern day.
Don’t chop water when you should be carrying wood.
- Old Zen Proverb (updated for the 21st Century)
Last week, I wrote about the connection between vision, strategy, and action in a business, and how great organizations find the balance between:
a) Making the right changes at the right time and
b) Having the discipline to “keep on keeping on” and just doing more of what is working.
Note well that b) is particularly hard to maintain when the tasks and activities that ARE working become repetitive and lack in excitement and drama.
So how does do executives find this balance - between being creative and just keeping their heads down and plowing forward?
Well, luckily in the past few years a large and impressive business literature has sprung up that codifies best practices of how to find this all-important balance.
It can best be summarized by the phrase “immersion plus spaced repetition” and goes like this:
1. Everything, of course, begins with ideas, with the best ones arising from a series of introspective strategic planning and goal-setting sessions that clarify objectives and the obstacles standing in the way of their accomplishment.
This immersive process - done at least annually but at the best companies quarterly - both defines what needs to be done and inspires all to take on the hard work of getting it done.
The value of inspiration cannot be underestimated – Thomas Edison famously said that “genius was 99% perspiration and 1% inspiration” but that 1% “spark” is uber-critical in propelling an organization through the various thresholds of change.
2. But, as anyone that attended an exciting or invigorating conference or strategic planning session can attest (and as I am sure Mr. Edison reflected on often during long nights at the lab), inspiration fades over time.
Even worse, when the inspiration is not followed through on, cynicism can set in and actually leave an organization worse off than if the planning sessions were never done in the first place!
So how to avoid this distressing fate?
3. Well, by keeping the ideas, goals, and objectives of the planning session alive through their regular review and adjustment.
Think of it this way - if a well-run strategic planning session is the essence of good leadership, then repetitive goals reviews are the essence of good management.
Great managers check in with their teams as often as daily - if only for 5 or 10 minutes - to review the day’s objectives and to keep the shorter term work flow aligned with the longer term planning and mission objectives.
The old adage that the only way to eat an elephant is one bite at a time is never more true than when is comes to these spaced and repetitive management check-ins.
When done right, they measure, acknowledge, and reward incremental progress and prevent the desire for the perfect from getting in the way of the doable and the done.
Then, the organization reconvenes and reviews progress against stated goals, assesses what worked and what didn’t, and then refines and updates the key goals and objectives.
And after this next round of strategic planning, what is done?
Well, the spaced and repetitive management check-ins begin anew.
Wood is chopped, water is carried.
Following this simple but disciplined formula, over time great ideas become great realities, businesses are built, and legacies and fortunes are made.
And for investors, far more than technology these “above the line” leadership, management, and company culture disciplines separate the well-run companies to back from the disorganized ones to avoid.
So what are you waiting for?
Every business needs a vision - a clear definition of what its leadership seeks the business to become.
And every business needs a strategy - a road map of how the business will reach its vision.
Once the vision and strategy are clear (and yes, this is hard), the next step is action planning – the day-by-day mapping of how all of this good but sometimes theoretical “stuff” will actually get done.
This, involves determining which projects will be completed (and as importantly, which ones will NOT be done), by whom and when, and how many resources - work hours, money, and assets - will be required.
Now, this is lovely for the whiteboard but what a company's strategic plan more often than not looks like is this:
Unclear, Unshared Vision. With all the time most management teams spend talking to each other, it's surprising how often they have different pictures of what everyone is supposed to be doing and in what direction they are supposed to be heading.
It's the hard and repetitive job of leadership to repeatedly communicate the plan (i.e. the vision, the strategy, and the day-to-day road map of how to get there) until all are on the same page.
And then rinse and repeat.
Planning Once Per Year, Out Of Routine. So many of us, right around New Year, think about our personal goals for the year ahead.
Similarly, many businesses work on their yearly plan during the same month of every year.
And then they forget about it.
The best businesses, in contrast, create, refine, and live their business plans in real time, every day.
Yes, this is hard, now more than ever because of…
The Tyranny of the Urgent. A HUGE challenge to executives and businesses attaining greatness is how difficult it is, because of technology, to not let those “urgent, but NOT important" activities dominate our days.
More than ever, we must fight for the time and attention to do the great and important work, and block out those insidious distractions everywhere and always around us.
No Process or Methodology For Strategic Planning. A best practice is to focus on vision and strategy in one set of sessions, and then on the day-to-day action planning, accountabilities, and progress measurements in another.
In discussing vision and strategy, we are in creative mode, exploring any and all options and ideas.
In contrast, figuring out action plans and accountabilities are best suited for separate, more “Tough Love” and analytical-type meetings.
With appropriate time set aside for vision, strategy, and action planning, a business can experience the collective joy that comes from knowing exactly what it is striving toward and how it will get there.
Everyone at the business will feel more grounded, balanced, and centered.
Being so all will come to work with greater purpose and passion.
And, at the end of the year, we will all have far more to show for our efforts.
“Good businesses are ethical businesses. A business model that relies on trickery is doomed to fail.”
- Charlie Munger, Wesco Financial Corporation Annual Meeting, 2009
I am blessed as part of my work to regularly moderate executive team strategic planning and group sessions for companies and organizations that have been around for a long time, including:
• One of the oldest continuously operated hospitals in the Western United States, founded in 1887 and whose Board Chair is one of the most famous investors in the world.
• One of the largest commercial collections agencies in California, boasting of more than 20% of Fortune 500 companies as their clients, and now entering its 85th year.
• A Michigan - based, automotive tool supply company that this year will celebrate its 70th anniversary and whose founders trace collaborations back to Walter Chrysler and other giants of the car business.
• One of the United Kingdom's largest multi retailer voucher and prepaid gift card companies (2015 revenues US$ 420 million+), that this year will celebrate its 50th year in business.
While these organizations compete in vastly different industries and cultures there is within them all a common “longevity core” that has allowed them to navigate, pivot, and win through various and multiple storms and dramatic shifts in their markets where the vast majority of their competition have not.
And always when I moderate these kinds of sessions, and ask executives to share the “Whys” of their companies, what they stood for when founded and how that meaning has evolved over time what comes often to mind is the theme of one of the greatest and most under-rated business books of all time – Arie de Geus' The Living Company.
In it, the author shares a lifetime of research and study as to why some companies and organizations “live…through the upheaval of change and competition over the long haul.”
As de Geus’ so eloquently writes:
The idea of a living company isn't just a semantic or academic issue. It has enormous practical, day-to-day implications for managers. It means that, in a world that changes massively, many times…you need to involve people in the continued development of the company. The amount that people care, trust, and engage themselves at work has not only a direct effect on the bottom line, but the most direct effect, of any factor, on your company's expected lifespan. The fact that many managers ignore this imperative is one of the great tragedies of our times.
This inspirational and almost idealistic point may seem contestable in our age so dominated by tech high-flyers (to say nothing of the tenor of the current political campaign!) that seem to have gained their prominence through such a powerful combination of IP prowess, network effect, and first-mover advantage that really any company culture and any collection of reasonably talented individuals could run them well.
For a short time, maybe yes.
But to sustain themselves over periods measured in decades, to transition leadership and management through generations require a robust, flexible, and truly “living” culture.
And that in turn requires something we don't talk enough about in business nearly enough – leadership.
The kind of leadership that once was the obvious expectation for persons granted the blessing and privilege of being at the head of an organization of any size.
The type of leadership that does not sacrifice the long-term for the sake of the short-term.
The type leadership whose goal is not “an exit,” but rather a contribution - to shareholders, to employees, to customer, to community.
Leadership that knows that a handshake and one's word is a better and more appropriate form of agreement between gentlemen and gentlewomen than a contract can ever be.
And leadership that recognizes that to survive and prosper through multiple generations is both an amazing accomplishment, and a charge to keep.
The charge to not only match the good and hard work of those that have gone before us.
But given the opportunities afforded by our technological and global age, to far exceed them.
In growth and profits, absolutely.
But, in character, principle, and doing the right thing too.
What makes up and how does one develop a great financial forecast for a smaller, privately held company?
Should the forecast be “realistic” – i.e. feel “doable” and in line with past results or…
…should it be “aspirational,” not hot air by any means but also representative of goals that makes managers feel more than a little anxious as to their ability to attain them?
What is the actual “projections-making” process? Is Microsoft Excel the only “tool” option?
How much industry, market, and competitive research should be done to benchmark our forecast against relevant comparables?
And perhaps most poignantly, if there is not a regulatory or shareholder requirement, why even do it?
Answers to these questions and great way to think about the process and purpose of financial projections can be had via what I call the “HMCBW” approach - examining the Historical data, the Market conditions, the Competition, the “Bottom-Up” assumptions, and finally and most importantly what management Wants.
It looks like this:
#5. Let History Be Our Guide. The first thing to do in assembling projections is to evaluate what was, and was not, financially accomplished by the business in the past.
While the previous period (most usually the previous year) is usually most indicative, there is also great wisdom to be had in looking back to more chronologically distant periods as well.
This is especially important in our now seemingly permanent “uneven” economic environment, driving the need to defend our assumptions in various (bullish to bearish) future market and competitive scenarios.
#4. How Big is My Market? Undertaking a formal and comprehensive study of a business’ industry, market, and competition usually leads to one of two results - either the target market is much smaller and less lucrative than surmised or…
…it is defined so imprecisely and broadly as to uncover faulty strategic thinking / an unsound business model.
Either outcome, both painful, naturally lead to the kind of hard introspection and business model re-positioning upon which solid financial projections (and ultimate business success!) depend.
#3. How is the Competition Doing? We live in this most amazing time where our competitors - as part and parcel of their sales and marketing strategies - just post to the Net their business models for all to see.
Additionally, amazing tools like CapIQ, Hoovers, IBISWorld, LexusNexis, Statista, and Follow.net give us inexpensive access to often shockingly accurate financial data (even profits!) on even the smallest and most secretive of private companies.
Utilizing this data as benchmarks for our projections is incredibly powerful. We do not need to be wed to how our competitors do it, but we would be foolhardy to not study and learn from them.
#2. Bottom-up! The business analytics revolution - as represented by the dozens of SaaS business process applications and productivity tools (with their incredible reporting functionality) - allows for the assembly of Bottom-Up financial projections with an “actual data” specificity like never before.
This might look like building revenue projections based on the conversion ratios of web traffic to inquiries (phone, e-mail, text, etc.) to proposals, to sales, to retention, to ongoing revenue.
These bottom-up models, in addition to being powerfully predictive, are also highly insightful as to the performance of various aspects of an enterprise - its marketing, its salespeople, the quality and efficacy of its products and services, etc.
#1. What Does Management Want? The fuzziest - but also by far the most important factor when developing projections is just asking what management and ownership want to see happen.
What kind of revenue and profit projections will inspire and embolden? Will force to the forefront the need for breakthrough business model thinking and doing?
Answering these “inspirational” questions is fundamentally important in assembling projections that serve the objectives of managers and owners, and not the other way around.
Historicals. Market size. Comparables. Bottom Up. Want.
Follow this five step model in building your growth, revenue, and profit projections and watch the Manna from Heaven flow!
“It is not the business that earns a profit adequate to its genuine costs of capital, to the risks of tomorrow and to the needs of tomorrow’s worker and pensioner, that “rips off” society. It is the business that fails to do so.”
- Peter Drucker, The Delusion of ‘Profits,’ Wall Street Journal, 1975
I was recently recommended a great book, Confessions of the Pricing Man How Price: Affects Everything by Hermann Simon, widely considered the leading expert on business pricing of all time.
Doubt this? Well, Mr. Simon is so renowned and respected as THE pricing guru that he has built a $300 million+, 32 offices (in 22 countries), 860 employee consulting firm focused exclusively on advising many of the biggest and most profitable companies in the world (including American Express, BMW, Coca-Cola, Goldman Sachs,Grainger, LinkedIN, Skype, among very many others) advice on pricing strategies that maximize profitability and the customer purchase and consumption experience.
This "Win-Win" duality - that yes we can charge a profitable price for our products and services and that our clients and customers can feel good about it, is a simple but incredibly profound wisdom that the vast majority of businesses just don't get.
And not doing so costs them dearly.
Because in this Internet Age of ours - with no matter what businesses we are in or what we sell - there are thousands of competitors offering similar, comparable wares, far too often we are all seduced by the siren song that if we just lowered our prices...
...sales would increase and with greater volume “eventually” we would figure out how to reduce costs to make up for the lost margin.
Unfortunately, as Mr. Simon explains in his book, lowering prices is almost never the right strategic choice, and referencing the Peter Drucker quote above, makes the profound point that as business owners maintaining sustainable is not only a business imperative, but a moral one too,
To achieve and maintain high prices, Simon advises that as sellers we must 1) shun from our minds forever the "Engineer's Fallacy” that if we just build a good product “they will come" - i.e. that marketing and branding do not really matter and 2) to truly “get” that the buyer's pricing experience is decidedly not a one-time event at the moment of purchase, but an "experience over time."
And as that experience is a high quality one where our product / service delivers on its promises and confers emotional, psychological and social benefits that are important to buyers, then the price charged - no matter how high - will be experienced as a fair one for almost all buyers.
Let’s put this all into three quick ways to put these pricing insights to work right away:
#1. Buy and Read Simon's book. It will change forever for the better how you think and act about pricing in your business.
#2. No time for that? Then start thinking less about the features of your product and services (technical specs, input costs, delivery time, etc.) and far more about its benefits (safety, prestige, sex appeal, contributing to the greater good, etc.). “Benefits Thinking” like this will immediately get us focused more on marketing and branding and less on operational costs and considerations.
(For a brilliant illustration on the power of Benefits Thinking, watch this video of arguably the greatest business strategist of all time announce and explain the launch of one of the most famous and successful marketing campaigns of all time).
#3. No time for #1 or #2? Then just raise your prices! Reference my “Using the 20% Rule to Double Business Results” logic and challenge oneself to raise prices 20% this year, consequences be darned.
My strong bet, and Mr. Simon would most concur, that doing so will create a virtuous circle - happier customers at the moment of purchase and throughout their consumption experience, and more profits too.
For conversations around business financings and sales, there are natural tensions, of time, credibility, and trust, between entrepreneurs seeking to be financed/sold (“Sellers”) and the investors/acquirers that approached for $$ (“Buyers”).
And if these tensions are not resolved, a deal cannot get done.
Time Tension is the idea that our entrepreneur seller almost always seeks to have their business valued based on its future potential, while our investor / acquirer buyer seeks to price it based on past results.
Note that time tension is present no matter the stage or size of a business, from the startup raising its first round of capital to the multi-billion dollar public company explaining its quarterly earnings and giving guidance for the period to come.
Very importantly, it is almost always the sellers responsibility to proactively resolve time tension to move a deal forward.
First, this involves having clean, concise, and easy to access financial and company records (no matter how unimpressive they might be) available for buyer review, along with the ability to coherently explain why the results were what they were.
Secondly, it involves the Seller telling a Great Story of how results will improve in the future.
This great story must be both "Top Down" and "Bottom Up." The Top Down story is a firm point of view on what one's industry and marketplace will look and behave like in the future (say in 3-to-5 years time), and then how our business is well-positioned to profit from this evolving reality.
A great example of this is Travis Kalanick, Founder and CEO of Uber, who communicates with amazing eloquence his view on the future of transportation and mobility, and then how Uber's growth plan is being evolved and executed upon to benefit from this evolution.
And our great story must also be Bottom Up, detailing as specifically as possible how people, technology and financial assets will be brought together in a cost-conscious and hard-to-duplicate way to execute upon our growth plan.
Yes, creating both great Top Down and Bottom Up stories is hard and doing so requires the expenditure of a LOT of brain juice by smart and dedicated people.
But doing so at a high level can be worth a LOT MORE in accretive value (like $62.5 billion more, as in the case of Uber) and as importantly is the only way to...
For past financial results, they ask who prepared them.
For financial projections, they ask where is the proof that its assumptions will come to pass.
For our “Top Down” opinion on where our market is heading, they ask based on what.
And for our “Bottom Up” operational plan, they ask us to show them evidence from our past that we can execute upon it.
And as we provide this evidence, they ask if we are still motivated and young enough to do so again.
Sellers must put their pride aside and really hear and empathize with these buyer doubts, and then patiently overcome via attention to detail and via extremely high quality thought and business presentation...
...and via a Pig-Headed Determination to repeat that business presentation over and over again until some buyer (and it often just takes one!) says yes.
Yes, Webster defines determination as "Willfulness infused with discipline."
Willful, determined entrepreneurs, who through their work ethic and discipline produce high quality business stories, and then repeat those stories over and over again...
...well they are the ones that the resolve the Buyer - Seller tensions of time and credibility, and build trust so deep that only a handshake is needed to get a deal done.