business builder management
Use big-company
tactics to manage
small firms, too
by Joe Techar
Scene One. Late summer 2003. It’s a glorious morning and the key executives of ABC Financial Services are looking forward to a productive annual planning session. The group meets at a comfortable off-site location to prevent the frequent interruptions that marked last year’s on-site meeting.
Each has assessed the strengths, weaknesses, opportunities and threats affecting the company prior to the meeting and comes prepared to discuss such questions as, Should the company expand into different distribution systems? Should it grow by acquisition or by internally sustained growth? What’s the company’s exit strategy? What’s the most efficient way to invest the company’s capital? Is the branding strategy working? What are the staffing needs?
The president, CFO and marketing director assess the plans from the previous year and each presents visions for the company including financial projections, sales and marketing plans, and a long-term corporate vision. The meeting is an overwhelming success. Many issues are candidly discussed and resolved. The executives are especially pleased with the strong consensus around the corporate vision and the expansion plans that were laid out for the next year.
Scene Two. Four months later. It’s a dreary December day and the key executives of ABC Financial Services assemble in a conference room to discuss an aggressive merger offer from EFG Financial. On first blush the executives did not think they would accept, but feel they have a fiduciary responsibility to review the offer for the organization’s shareholders.
Tensions run high as they assess the following: What are the financial implications? Is there a cultural fit between the two organizations? What are the advantages and disadvantages of merging now? Are there any implications to the company’s employees? What effect will a merger have on the stakeholders of ABC Financial?
Later that afternoon the clouds have parted, the sky is blue and spirits are high in the boardroom. The executives have developed a strong counteroffer for EFG Financial and a plan for communicating the situation to the company’s stakeholders.
Are these scenes from a large corporation? Not necessarily. In fact, the scenes above describe my own firm, Wildwood Wealth Management, a five-person wealth management firm. The reality is, these situations can and do take place in companies of all sizes.
It’s amazing what you realize moving from a large company to a smaller company: the situations encountered in managing small companies are exactly the same as those experienced at large companies. Furthermore, the skills, organizational structures and decision-making processes that work so well in the “corporate world” can be directly applied to small business.
Hold an annual planning session and evaluate performance and goals quarterly.
The most important process or structure, which should be in place from a company’s foundation, is planning and evaluation. Far too many small-business owners decide to “just wing it” until they have the time to plan and more executives to assist.
When I started Wildwood in 2000, I had a definite plan in place. My plan not only helped me in the day-to-day operation of my business, but it also was highly impressive to the many stakeholders I became associated with as my business grew.
Once an annual plan is in place, it should be broken down by quarter. How many customers will you have after your first quarter in business? What will your gross revenue be? How many employees will you hire? Work those types of achievable, quarterly goals into your plan, then sit down at the end of the quarter and assess how you did. Did you meet your goals? If so, should you raise the bar for next quarter? If not, where did you go wrong and how can you fix it?
Develop a mission statement.
It may seem like a mission statement is just a bunch of words that sound nice and look good on a plaque by the front door. However, a well-written, thoughtful mission statement that everyone in the company believes in can set the stage for much more.
It is the philosophy of your business, the reason people come to work each day and the model for how your clients are treated. It can set the framework for your marketing messages and it’s a wonderful way to come to a meeting of the minds when a company is new.
Development of the mission statement should be a collaborative effort, even if you’re starting a business on your own. Talk through your values, business goals and reasons for doing the work you do with others and take their opinions into consideration. Make it a thoughtful and creative statement, one that can stand the test of time.
Consciously hire people specifically for having different skill sets.
When hiring, be it an administrative assistant, key executives or a partner, make sure to choose wisely. It’s important to include people from different backgrounds, with unique skills and talents, and even varying personalities. Everyone should have new skills to offer that can benefit the company. All too often people hire in their own image.
Identify areas of responsibility and assign people to be in charge of those areas.
Marketing, sales, accounting and human resources are positions that require special skill sets. In the case of a young company, you may not have the resources to hire a seasoned marketing person, but you may have a partner or administrative person who has talent, or better yet prior marketing experience.
While everyone may pitch in to get certain goals accomplished, one person should be directly responsible for managing a specific area and should be charged with reporting on its progress during quarterly evaluations, as well as developing plans for its future.
Besides the fact that decisions can usually be made much more quickly, running a small company is much the same as running a large company—the only difference is the number of zeroes.
Joe Techar is a partner with Wildwood Wealth Management in Minneapolis, an independent boutique wealth management firm providing services in asset protection and management, estate planning and tax management: 612.338.0677; joe@wildwoodwealthmgmt.com.
