Clarity.

It seems so easy, we just need to be clear, get clear, gain clarity. Yet, clarity can be and feel elusive. We had our monthly Chief Executives meeting in Las Colinas last week and our Executive Workshop was led by Patrick Ungashick the Chief of Navix Consultants. Patrick has been at the table with hundreds of owners who chose to exit their business and he naturally brings clarity on this topic.

He asked just three questions at the beginning of our session and one of these was what Key Performance Indicators (KPIs) are you tracking? Our team gave a wide range of answers representing the diversity of businesses in the room. Sales, profit/EBITDA, A/R, New client acquisitions, Employee retention, Cash, Cashflow, Student starts, carrier payments and a few others. They are all good answers, clearly our CEO’s and business owners are  and  leaders. And yet, on another level many of the answers missed the mark for this conversation. Over 50% of our members are owners and unlike a large public company many had not devised a way to track their company value. And the value, not the growth of the company will determine their final pay day when they finally do sell.

It was a three-hour dialogue, so I am simplifying it greatly in this post. The other part of the discussion included selling as the market is rising, achieving certain levels of EBITDA to jump up to the next multiple and a range of other items and decisions that become important when you sell and that are often made years, sometimes decades before the sale.

My three big takeaways from our workshop last week were:

 

• Get clear on your goal. Is it to sell next year? In 10 years? To pass the company to your family? To hire a CEO and be engaged in a less active way? Gain clarity on what your ideal outcome is. 
• Identify a way to track your progress.   While most of our members were tracking growth, Patrick brought our attention to the 50 plus items that could make their companies more valuable that were not being tracked. This checklist is something they assessed their businesses against last week as a baseline and will now look at once or twice yearly to assess progress. They are now tracking Transferable Value. 
• Commit to your goal and create accountability. For some of our members they are already clear, their exit dates were a day and month rather than just a year.  Others redefined their goal from 10 years out to 2026 with a commitment to start using the checklist. For all of our group there is now accountability to move towards the date and goal intentionally to deliver top dollar and the best outcome for our owners, our CEO’s and their stakeholders.

Patrick has a new book coming out called A TALE OF TWO OWNERS, Achieving Exit Success Between Business Co-Owners. He can be reached here  http://navixconsultants.com/contact/ or here Patrick Ungashick Linked in.  

I work with CEO’s, founder and owners inside their businesses with their executive team to improve their business outcomes and with a group of non-competitive CEO in my Dallas, Texas peer group. Our group is designed to help members make Better Decisions, become Better Leaders and deliver Better Results. I can be reached at staci@stacitubbs.com