02 Mar MONEY MATTERS: “Procrastination is not a business strategy,” John Holland from Plutus Consulting’s Read the whole article here http://www.todaystrucking.com/mag.cfm
MONEY MATTERS: “Procrastination is not a business strategy,”
What John Holland from Plutus Consulting Group is saying about
The 7 Steps to Selling Your Trucking Business.
Read the whole article here http://www.todaystrucking.com/mag.cfm http:/
Street Smarts
MANAGING PEOPLE, TECHNOLOGY, BUSINESS, AND SAFETY
The 7 Steps to Selling
Your Trucking Business
Nobody’s going to be buy your business if a: it’s
unhealthy or b: they can just take it. John Holland says if you
want to be sure of a sale, step right up. By Peter Carter
John Holland’s first taste of the com-mercial trucking business came two months after he had been
named General Manager for East Africa in Nairobi, Kenya, for Kiwi Brands. “In my first two months,” he says, “two trucks were hijacked. Never to be seen again. That’s when we installed GPS and onboard security systems.” He moved to Canada and for seven years steered logistics and supply chain for Sara Lee International. Now he works with the Plutus Consulting Group, where he specializes in helping business opera- tors prepare their enterprises for sale andtheir proprietors for comfortable retirements and/or prosperous succession.
According to a study done by New York University that looked at more than 500 dif-ferent businesses in 20 dif-ferent countries, regardless John of whether you want to sell Holland your business or move it
successfully from one generation to the next, the enterprise must pass through what Holland—and Plutus—term the Seven Stages of Selling your Business. “Selling, retiring, having a real holiday,
if you want to build your business to a level where you’ve got choices about how you want to spend your life, you need to go through the seven stages,” he told Today’s Trucking.
STAGE ONE: “In the cornflakes”
In stage one, Holland says, you’re full of energy and engaged in making money on a day-to-day basis. “You’re not actually thinking about how to grow the business; you’re working 24 hours a day, you’re really
in the cornflakes and you’re fully engaged.” Many owner-operators, he says, remain in stage one so no matter how much money they earn, they will probably never be wooed by corporate suitors and neither will they be able to watch the company move into the next generation’s hands. In stage one, very often the com-pany book keeper is a spouse and far too much business is conducted on an informal basis. To move out of stage one, Holland advises the proprietor to do some organiz-ing, planning and defining. “This should be easy especially for an owner-operator who has plenty of time behind the wheel to think about these things,” Holland says. “Procrastination is not a business strategy. And neither is hope. Hope is not
a business strategy,” he says.
STAGE TWO: “Branding time.”
The “vast majority” of small businesses are stuck in stage two, he says. You will become mired down in this
stage unless you determine exactly what it is that makes your business different from the competition and exploit that difference as much as you can. “There is not a successful company out there that was not led by an expert. The owner must develop a real passion for the service and become an expert.”
At this stage, Holland says, “the business starts to separate from the owner but its success is still very dependent on the founder’s drive. “Now there are quality controls being implemented by the owner,” Holland says.
“You have to know the costs of your trucks and how much revenue you expect to get from them over the course of a year and how much you’re budgeting for profit.” Quality controls must apply to internal
accounting procedures, budgeting and personal accountability.
STAGE THREE:
“Welcome to the sandbox!”
If you’ve graduated to stage three, your business is growing and you are its best sales person. It’s also at the most precarious stage. “I had a client who had $10 million in sales, he was 55, had a nice profitable business but he would never be able to retire early, even though he was doing well. He was stuck because he gave his people no opportunity to flourish or grow in their jobs. You have to start letting go. “At this point you’re having fun and making money and inviting new people into the sandbox but if you’re not very careful, you can get sand in your eye and ruin everything,” Holland says. You should be working on the business more than in it.
STAGE FOUR:
“Look at all the muddy fish!” “You know those people who hang around the water cooler and moan about how much better it was in the early years? When you’re in stage four, you’re going to have to have a talk with those people. Either they buy in or they’re out. “I call those people muddy fish because they don’t want to help clear the water; they like it murky. I promise you the day the boss does something about them is the day morale will start to increase.” According to the Seven Stages, the company’s orientation by now must be towards continuous improvement, and that means having performance monitoring and man-
agement systems place.
STAGE FIVE:
“A franchise is born.” In stage five you’re looking like a franchise. “Because the business is sustainable, it
could outlive the owner,” Holland says. In stage five, “you’re starting to make the house shine,” and a team other than the owner is handling the day-to-day running of the business.” By this time, the people who work for you expect and get regular performance appraisals as well as non-monetary incentives and recognition.
You have a succession plan in place. The company, in stage five, is actually replicable, like a franchise
STAGE SIX:
“Exit ramp in sight.” You might still be managing the business but if you wanted to step away, you are
completely comfortable with your management team. While each individual member of that team is talented and valuable, the business will thrive even if they’re all replaced. The business has a strong balance
sheet and operates in the black. Only now can the owner see the real possibility of an exit ramp. Suitors have probably already come calling.
STAGE SEVEN:
“A Legacy is born.” By this time, everything is optimized. You’ve now got a brilliant management team ready to do an IPO or a management buyout. If a venture capitalist came into the company, they’ll see all the right people in the right places. You run your
trucks and your offices compliantly and follow regulations rigorously. Financial performance is consistently strong; products and/or services are known and respected. A legacy is born. And if you decide to retire now or move along, you just call in your bankers and
look for a buyer. ▲