Let’s Say The Owners And Key Decision-Makers Of A Business Conclude That They Need Legal Help To Fix Their Business, And They Come To You For Help. What Are Some Of The Most Important Questions That You Are Going To Ask Them?
- One of the most essential parts of the conversation is to have a business owner is to define the outcome they actually want. All of our strategizing is based around the answer to that question.
- Identifying the problem with a struggling business starts with looking at the story told by the numbers.
- Transparency and openness, as well as the business owner’s commitment to keeping an open mind and a positive and flexible attitude, are all essential for our strategies to work.
The first question that I’m going to ask to decision-makers and business owners is this:
“What do you want?”
While this is one of the simplest questions I could ask, it’s oftentimes one of the most difficult to answer. There are so many components to what key decision-makers might want, and so many emotions that impact them and that are attached to these components. It can be difficult to sit down and have a moment of clear thinking around what they want, let alone for them to make a decision about what they want.
As a business owner, you’re running at 100 miles an hour, all day, every day. You’re simply spinning, as opposed to slowing down and taking the time to think clearly about what you want to achieve as the outcome.
My goal with asking owners what they want is for them to have the space to stop and think, “Okay, this is my business. I’m responsible for it. What is it that I want?” Once we have the answer to that question, or talk out the answer to that question, we can make a plan for implementing it. We help business owners articulate their vision to their investors and explain what it is that they want and how the company can make it happen.
In small and closely held businesses, there are usually one or two key decision-makers. Their answer to this question is the foundation for the strategy we recommend.
Self-imposed limits and fantasies on what can be achieved are commonplace, and usually not entirely accurate. By taking the time on the front end to define the desired outcome is.
Once we have that critical conversation, we are able to determine whether we can help achieve the desired outcome and if we are the right team to help. One of our core values is to always seek truth without compromise. As such, we are 100% committed to being transparent, open, and honest with our clients. If we feel that the desired outcome is not something we can help achieve under the circumstances, we will immediately decline the engagement and work to refer a prospect to someone who can help.
No matter what the answer is, I believe that being absolutely clear on what the business really wants is the most critical question to answer. This gives us insight into how the business owners and key decision-makers make decisions. They typically follow a pattern that is helpful for us to understand at the outset.
If A Client Comes To You Asking How To Save Their Business, What Does The Strategizing Process Look Like?
If we want to figure save their struggling business, the first thing we want to do is understand the source of the problem and what “saving” actually looks like.
One of the ways we figure out the problem is by looking at your numbers. In business, your numbers will always tell the story. They’ll tell us what happened historically, and give an indication of how long the problem has grown. Our strategy discussion starts with identifying the issue. Looking at the numbers is one of our best possible tools with which to do so and our conversation is about the stories behind each of those numbers.
Once we identify the problem, it is absolutely essential to be open and honest about that problem. This level of transparency is invaluable, not only for the key decision-makers, but also with your creditors and the people that actually make that business run. In the end, companies are amount to little more than groups of people working together to sell, create, or build a service or a product. Therefore, all of those stakeholders must have an appropriate level of inclusion in any conversation about the problem and you must be able to clearly articulate how you plan to solve the problem – including their role in helping you solve the problem.
The fastest way to fail in a business reorganization is to build a plan that is not based on solving the root cause of the problem. Too often, businesses find temporary relief in a bankruptcy proceeding, only to emerge from bankruptcy and fail again within a few years.
Why Do You Think A Positive And Flexible Mindset Is So Important When Businesses Try To Take These Steps?
The mindset of a business owner is very important during the process of fixing issues and saving the business.
The owner of a closely-held business is typically a visionary leader who is responsible for pulling every lever within the business. Our role is to support their vision when implementing steps toward change. This requires full acceptance by the leader of the business for his or her role in creating the financial challenges the business is facing. Every member of their team is looking to them for leadership and guidance. As such, the business leader must own the problem and be fully committed to doing whatever it takes to fix the problem. The process of restructuring is not a painless process and it affects every member of the team. In order to move forward, it is critical to maintain the team morale.
Importantly, having a positive and flexible mindset is a choice. We tell prospects that the difference between their successful reorganization and long-term failure is in their ability to make difficult decisions. Like all decisions, you make based on the information that you have available to you and our role is to help uncover the best information and formulate a plan on which the business can not only survive, but thrive.
I also caution my clients to do everything they can to remain objective. Oftentimes, the mindset of owners sways them to make decisions that are designed to protect their ego. Specifically, their decisions are often designed to protect the part of their ego that hasn’t really been fully developed. It goes in the heart of darkness, to the thing that scares them the most, to their darkest fears.
I have seen many owners make decisions to avoid what they fear, as opposed to being able to look at the situation, evaluate it objectively, and recognize that they are making the best decision based on the information that they have. Many owners have a deeply imbedded fear of failure (or the appearance of failure) that cause them to make decisions that a fear-based and eventually lead to an outcome that reflects negatively on the business. Our role is to encourage them to recognize when they are making these decisions and understand their own internal pattern. This process of slowing down the decision process just enough to allow the owner to articulate the reason for making it they are making it creates space for them to make the best possible decision given the information they have in that moment.
Separating owners from the decisions they make gives them the freedom to be open and transparent, and to listen differently. Remember: the decision should not be viewed as a statement about who you are. We remind our clients of this often.
Business owners can be blinded or swayed by their own personal protection mechanisms. These keep them from truly being able to hear and listen to all the people around them. Our goal is to break through that protection mechanism so that our clients can hear us objectively. It’s essential for owners/decision-makers to be able to hear the people around them and every person involved in the business must be aligned behind the plan for reorganizing the business.
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