The Most Important Person In Your Business

This week’s newsletter is a day later – due to the preparation of a brand new event happening this weekend called Dealmakers Live! – two days of networking and learning from my Mastermind clients who are speaking about how they got started and the huge successes they’ve had.

Plus – it’s a residential weekend so there’s dinner, drinks and an overnight stay.

And watch this space for our Dubai event, happening in April!

I promised last week that I would be discussing the ten elements of a successful buy and build and each week pick one of the elements for discussion.

So this week I’m going to talk about your management team – an essential part of your buy and build strategy.

I don’t mean ‘Jo who comes in once a fortnight to do your bookkeeping’ or ‘your dad who keeps the warehouse running smoothly’.

I mean a senior management team that runs the business so that you are truly redundant from the day to day operations.

The problem with small businesses-and the reason they stay small, is that the owner is the centre of their universe.

Everything revolves around the owner.

And even when the business grows the owner is often the person the team reverts to on all decisions, as things need to be done ‘a certain way’ – the way the boss likes them done.

This is a major problem because you are now the bottleneck in the growth of your own business.

And growing via acquisition is going to be painful as that rapid growth it brings will mean that your time and personal resources are going to be stretched to breaking point.

This is a conversation I’ve been having with my Mastermind Clients recently.

If you are going to buy a company and potentially double the size of your business overnight you need to be prepared for it and the best time to prepare for anything is always now!

There is a totally different mentality required for a business that does ￡1m in annual revenue compared to a ￡5m or a ￡10m or a ￡25m company.

And the key difference is the strength of the management team.

And when you come to look for investment or to sell, this management team is unwittingly going to help you get the best deal.

So who do you need?

I’ve said before and I’ll say it again – your Chief Financial Officer is a key player and the quality of their thinking and work might be make or break for you.

Your CFO will, amongst other things,

·????????Keep control of cash and the debtors in terms

·????????Forecast out so you can see future cash requirements in advance of a crisis

·????????Prepare management accounts within days of month end

·????????Find cost efficiencies, spot over spending and keep costs in line with income

·????????Raise finance as every growing business needs more cash!

·????????Keep a data room prepared so that you are always ready to sell…

·????????Conduct the financial due diligence on your acquisitions?and then integrate their accounting function.

Can you do this right now?

If not, you need to grow your finance team and the CFO is your starting point.

And when you have the CFO in place ensure that you have senior, experienced people running each aspect of the business, from operations to HR to marketing.

The goal is to make yourself redundant so that the business has the bandwidth to grow.

So many owners run out of ‘bandwidth’ and the business stalls.

Now, when I go on about these things it’s not because I know best because I’m perfect and you should copy me.

It’s because I’ve made all the mistakes so that I know that this is the only way to make it work.

Although it’s easy to forget when you are in the thick of it.

You get so caught up in the day to day that way of existing feels normal – when really the best things to do is to extricate yourself and hire or promote the senior team.

When I have a masterminder doing ￡10m a year as a result of acquisitions and they are dealing with petty matters, the problem is clear: they haven’t properly delegated and empowered them to make decisions.

Or worse still, there is no senior team and they are still running the business like the ￡1m company it was pre all these acquisitions.

It’s a subject I can’t emphasise the importance of enough and one I will no doubt return to many times.

If you want to join the next Zoom Business Acquisition FastTrack Programme – we have one starting next week: www.thedealmakersacademy.com/fast