The Glass is Half Full!

The Glass is Half Full!

By Doug Alexander

It is amazing how much things can and, in fact, have changed over a span of only a few years. Looking back two to three years, most of us remember with some fondness the growth that we saw in our businesses and industries, enthusiasm in the marketplace, and what appeared to be a “the sky is the limit” kind of attitude among business owners. Then, seemingly without warning, the capital markets crashed, the banking industry was on the ropes, unemployment skyrocketed, and hope and enthusiasm seemed to altogether evaporate. We are here to tell you that the glass is still half full! As we have worked with our clients through this difficult period we have noticed some common steps to success which, if they are followed, can help our businesses thrive and refill our glasses until they overflow.


When the economy was running smoothly, many business owners could survive and thrive with little or no planning – success just happened. Today, business plans are critically important. They help to set a strategic direction, give us a standard by which to measure our progress, and identify problems early so mid-course corrections can be made. Carefully work on and live by budgets, business plans, and marketing plans. They will keep your business headed in the right direction when everything seems to be falling apart around you. If you plan to succeed and then follow that plan, your odds of success will be dramatically improved.


As many of us scramble to meet the daily challenges of our businesses, it is easy to get so tied up in working in the business that we fail to step back and work on the business. Long-term planning and strategic thinking is important, not only for immediate success, but to position your business for future success. Ultimately, all business owners hope to transition out of their businesses one day. That transition may take the form of a sale, transfer to a family member, or shift to key managers. If we fail to work on planning for transition, we are setting ourselves up for failure. Businesses sell, but in today’s market, only those that are well run and organized sell for top dollar. Lift your head up from the daily grind long enough to work on your business from time to time.


In the past, routine business tasks got done quickly and often easily, whether that was negotiating a new contract, obtaining new or extended financing, finding and leasing space, or dealing with personnel issues. Today, uncertainty and fear have brought with them indecisiveness and, as a result, it seems that everything just takes longer and is harder to get completed. We need to anticipate longer lead times to accomplish our goals or we may find that we are up against deadlines that cannot be met given the inability of other parties to move quickly.


Have you noticed that getting people to agree to things seems to be more challenging today? Just as it takes longer to get things done, it is more difficult to get people to come to terms on matters and say “Yes.” An unwillingness or reluctance to commit is symptomatic of a lack of conviction about what the future holds.
Nobody wants to make a misstep, so sometimes we just don’t move at all. When people are not sure what the future will bring, they tend to hesitate and we are seeing more and more people hesitate. Anticipate this in your business dealings. Working to identify and address concerns on the front end of your business dealings will inspire confidence in others and will help you get to “yes”!


To be “stouthearted” is to possess or display courage and to face and deal with danger or fear without flinching. For those with vision and confidence, there are opportunities even in this challenging business environment. The strong and innovative are surviving, as the weak fall by the wayside. There is consolidation taking place in many industries. Niche markets are being found and exploited by those willing to take some risk. This business environment is not one for the foolhardy, but for those willing to carefully analyze and act on opportunities, there are both current and future rewards. We are proud to see some of our clients making the proverbial lemonade out of lemons.


A real threat to businesses today is undercapitalization. Banks have certainly learned that lesson. Lending standards have tightened and because obtaining additional capital is so difficult the undercapitalization can often occur. Many businesses have failed early in their lifecycle as a result of underestimating the need for capital. Typically it happens as a result of being far too optimistic in initial business planning. In the past, such mistakes could have been easily remedied but today successful business owners have to carefully evaluate their capital needs, develop and live by realistic budgets, and plan well in advance to meet those needs. Avoid surprises and realize that getting capital today is a far greater challenge than it has been in the past.


Interestingly, people seem to fight more over smaller issues in tough economic times. When times are good, business owners are more willing to look beyond disputes and move on, realizing that their time is better spent building and growing their businesses rather than engaging in a fight. Today, we are seeing a real growth in legal disputes and they take many forms. Disgruntled employees are looking for a way to cash in by suing employers. Customers are failing to pay according to agreed terms. Vendors may deliver inferior goods or fail to meet critical deadlines. When it comes to conflict avoidance, a pound of prevention is worth a pound of cure. You can prepare for the growing propensity of people to engage in conflict by having in place well-drafted agreements, personnel policies, and credit policies.


Every day you are one step closer to a future transition in your businesses. Have you adequately planned for this? Will your business be ready? Will you be ready? Will your successors be ready? Well, ready or not, here it comes. Burying your head in the sand will not stop the clock from ticking, the days from passing, or the future transition from coming. It can be a stellar success or an unmitigated disaster – the choice is yours and is dependent upon your willingness to plan and prepare for it regardless of all the chaos and distractions that may be occurring around you. Don’t waste a minute, or you may lose the opportunity and be too late. None of us know when our time will come, and we see all too often the damage done by procrastination when it comes to these important issues.

We live in and are conducting business in volatile times. Business is no longer “business as usual.” It comes with more risk and greater challenges. But remember the axiom, “The greater the risk, the greater the reward.” As successful business people, our strength is in seeing and seizing upon opportunities where others see disorder. We can harness our skills and experiences and take advantage of the opportunities we visualize. We can use our past experiences to help us analyze and adapt to change. Our firm is fortunate to work with so many business owners who are visionaries in their fields, and who are both surviving and thriving, even in a slow economy. They are acting proactively, continuing to be smart about how they do business, working with their advisors to manage legal and financial risks and prepare for an ultimate transition, and building businesses that are growing in value and will be long-term players in the marketplace.

So, while it would be easy to look at the situation and say that the glass is half empty, we encourage you to reexamine things and recognize that it is really half full. We have all lived through many unprecedented events in the last three years and we are likely see more. However, if we learn from the past and build on our common experiences, we can succeed in helping to refill the glass to the brim.