Over the past decade I have learned a lot about what it means to own a business, how business owners think, and what is most important to them. I have narrowed this down to a list of five recurring themes in the order that they manifest most frequently. Not all owners want the same things in the same order, but the underlying issues seem to be somewhat universal.
Of all the themes, cash flow is the most critical. It is emotional and practical. Cash is oxygen and when in short supply, owners become light-headed, then despondent, then desperate. Cash represents success and lack of it, failure. This is the one theme that always goes home with the small business owner. You might leave all other issues behind when you depart the office, but not this one.
For most owners, profit represents the freedom to make choices. It represents fuel for growth, and an abundance affords you more choices about how to grow. Profit is also a driver of valuation. It’s a way of keeping score – slightly edging out growth as the second most frequent need that owners have for their businesses.
When an owner tells me that Growth is a high priority, what that often means is that the company is not yet large enough to represent success to in his or her mind. Growth is only third on the list, because even the owners that want growth don’t want it forever. They have a target and want to get there faster.
This is the one thing that seems to be on everyone’s list. Is satisfaction an outcome or part of the journey? The fact that it makes this list tells me that it’s both. Having better cash flow will make the journey nicer, but without satisfaction – many owners will struggle to take the steps to fix cash flow. It is glue, it is lubricant, and it is essential.
The desire for harmony stems in part from wanting to be understood. Being an owner is a lonely job and the decisions you make often create discord amongst employees. Can’t we all just get along? Aren’t we on the same team?
The five themes are equally important, but differently prioritized. Each affects the other in much the same way that removing one petal from a flower affects our perception of that flower. To that end, what I have learned is that in order to help owners be more successful, we have to work towards all five conditions.