Your Business is Profitable - Now What?
An entrepreneur has successfully launched a business. Now that a business is created, now that the business is profitable, now that competitors challenge that profitability, and now that the entrepreneur-founder is an owner-manager, now what?
A new business book, Now What?, written by Rick Riebesell, a business consultant with Business Transition Consulting LLC, deals with the situation of the owner of a profitable business and describes how management skills, including necessary structure and process, can be put in place to derive the maximum wealth-building value from the business.
An entrepreneur starts a business, sacrifices to get it going, and accomplishes business profitability. With that status comes a new set of challenges. In a competitive situation, a profitable business will be challenged by those wishing to share and take away profitable business activity. The marketplace, including the tastes and desires of customers and clients, will change. The newly profitable business will maintain profitability only by reacting to the challenges of competitors and the marketplace. The entrepreneur cannot meet these challenges alone. With profitability comes new employees and growth. Now the entrepreneur is not creating but managing. The entrepreneur has become a business owner-manager.
Certainly creating a business that is profitable is a notable achievement, but wealth building, getting the value out of the business and into the bank account of the owner, requires that certain business structure and procedures be in place.
To derive maximum value – the most cash – from a business, it must be transferred to a buyer who is willing to pay the cash to the owners. To get the highest price, the business must not be dependent on the efforts of the selling owner. In other words, the business must have management that is not the owners. Because of concerns about maintaining control and other reasons, the entrepreneur-founder often is not comfortable with hiring executive management.
Rick Riebesell's perspective is unique. In addition to his fifteen-year experience as a consultant, he has been employed by businesses in a variety of roles, practiced law, owned and managed businesses, taught MBA classes, and dealt extensively with family business issues. His years of experience in working with owner-managed businesses has taught him that each business is unique. Having respect for the accomplishment of the entrepreneur in creating the business, he knows that often the skill set of the entrepreneur-founder does not include management skills or experience.
The concept and strategy is simple. The owner-manager must become an owner and relinquish management (but not control) to competent managers to derive the maximum value from a business. The execution of this strategy is difficult and unique in each business instance. Now What? deals with the execution of the strategy. It is a description of best practices that provides an owner-manager with the knowledge to understand management and control managers. With this knowledge a business owner can instill competent management without losing control. Maximum wealth-building value is obtained from the business whose success is not dependent on its owners.