Business owners do a lot of things right. This is especially true of the owners of profitable companies. However, many of the habits, traits and actions that got the business from startup to where it is now are exactly the things holding it back from the next level. Here are five things a business owner and/or seller should not do:
Emphasize potential—too many owners look at what their business could be not what it is. Of course, they expect to be paid for that potential (before its realized) because “it’s such a great business.”
Hang on too long—know when it’s time to get out. Too many owners coast and then wonder why buyers ask skeptical questions. Keep in mind that a decline to you is a little less profit. To a buyer, with acquisition debt payments, it can be a disaster.
Cheat the IRS—don’t skim cash. After all, what’s worse, a seller who says he skims cash or one who says he skims but really doesn’t. Also, don’t deduct your personal expenses that could be from Costco, the grocery store, vacations, your kids cars and insurance, etc.
Have to tell a story—if you have to explain why your business is better than the financial statements and tax returns show it is then you have problems you should have fixed a few years ago. It doesn’t matter who you have to explain it to, banks, buyers or prospective (key) employees.
Be a lone wolf—nobody wants a business that dies if the owner leaves, gets hit by a bread truck or sells. Build a management team and prove they know their stuff by taking a month long vacation. Better yet, for three months don’t do anything day-to-day. Don’t make sales calls, go on the shop floor, do any accounting, etc. Spend all your time on vision, strategy and recreation.