Several years ago my business law professor, Lloyd Peak, introduced me to the picture above. He showed us how people could all look at the same lake but depending on the viewpoint each observation was likely to be different. The differences could be the angle of the sun hitting the lake, the times of day, the season during the observation or the personal past experiences influencing the observer. I'm sure you could also describe a thousand other different reasons for the various differences in observations.
As owners we often see, through a filter, our businesses in how we want them to be viewed to others. After all, isn't that why we spend so much time branding and marketing our companies to be viewed in a certain way? But are we painting a picture that is only valuable from our view point and not our successors? We can certainly go through the merger & acquisition process and find out the view point of purchasers or ask potential internal successors about their views. But will that give us enough time to go back and fix issues to paint a different picture?
If you want to maximize your companies value you will need to first understand what the purchaser likes to see and if that is a white shiny picket fence then you need to build and paint a white shiny picket fence. But let me warn you ahead of time. Do not paint a white shiny paint over a rotten fence. Otherwise you might be staring back through gray shiny bars or looking at a very large bill sometime later down the road.
Plug for Austec: We spend a lot of time listening to expert advisors, to past business owners who have sold a company, transitioned the company to insiders and/or purchased a company in hopes of transferring that knowledge to other business owners. We really want to help you not make the mistakes of previous business owners by waiting too late to fix the issues that can take years to address before you transition the company. Call us today at 720-519-6073 for a friendly conversation and/or a high level assessment report.
Now to share what inspired this article:
A business man walked into a bank in New York City and asked for the loan officer.
He told the loan officer that he was going to London on business for two weeks and needed to borrow $5,000 and that he was not a depositor of the bank. The bank officer told him that the bank would need some form of security for the loan, so the business man handed over the keys to a new Ferrari.
The car was parked on the street in front of the bank. The man produced the title and everything checked out. The loan officer agreed to hold the car as collateral for the loan and apologized for having to charge 12% interest.
Later, the bank's president and its officers all enjoyed a good laugh at the business man for using a $250,000 Ferrari as collateral for a $5,000 loan.
An employee of the bank then drove the Ferrari into the bank's underground garage and parked it.
Two weeks later, the business man returned, repaid the $5,000 and the interest of $23.07. The loan officer said, 'Sir, we are very happy to have had your business, and this transaction has worked out very nicely, but we are a little puzzled. While you were away, we checked you out and found that you are a multimillionaire. What puzzles us is, why would you bother to borrow $5,000?'
The business man replied, 'Where else in New York City can I park my car for two weeks for only $23.07 and expect it to be there when I return?'
Don't ever underestimate a business man!
Have a great rest of your week!
Austec Business Transitions, LLC.
John Hamel is the Managing Member of Austec Business Transitions, LLC. helping businesses optimize value relative to exiting their company.