Everybody who regularly reads our blogs knows that we are big sports fans — and often speak in sports puns. There’s a strategy used in football — Bend, but don’t break — which is often utilized by the winning team towards the end of the game to sacrifice yards in order to run down the clock. Although the point spread may not be as high, the team that’s ahead ensures a victory. Conceptually, this strategy applies to businesses — sometimes it’s necessary to do what’s needed to maximize the valuation of our business at the expense of short-term or immediate goals.
One of the best things about being a small business is that you can be nimble and make informed decisions quickly without the burdensome weight of bureaucracy. Here are some examples of how you can bend in the short term to secure the future win.
Creative Marketing: There are ways to be creative in the way you market your business, some of which may result in a short-term loss For example, sending free samples or product at a lower margin to secure a relationship with a high-powered vendor may be well worth the brand awareness and larger purchase order down the road.
Research & Development: You don’t have to be a giant to invest in R&D. In the words of Robert Iger, “If you are not innovating, you are dying.” Sometimes CFOs or CEOs may be tempted to slash this kind of spending to save cash or show better short-term profitability; however, it’s important to keep a competitive edge by regularly investing in ways to help your company grow, i.e. product development, sales strategies, etc.
Staffing: It’s funny — we often hear people say the following within two minutes of each other: “I’m so busy I don’t have a minute to think.” (And then when you recommend hiring someone): “Oh I don’t have time to train anyone.” We can fall into the trap of being our own worst enemy. In a scenario where all your resources are tapped and you cannot clone or split yourself any further, it’s time to hire an additional person. Each potential hire should be treated like a special commodity — you need to make sure that you hire a person or skill set (rather than hiring a title). Doing so is the only way a business owner can truly do what he or she loves and needs to do to make the business successful.
New Business / Distribution Channels: Whether it involves hiring new salespeople or experimenting with new distribution channels, it’s important to be creative when thinking about ways to reach your end customer. With global supply chains impacted by capacity and labor shortages, reliance on one supplier or organization to manufacture your product is too risky a proposition in this environment. It’s more important than ever to analyze the key components of your product/services, the critical path of your production cycle, and the logistics of getting your product to your distribution center or customer.
Takeaway: All entrepreneurs know that in order to be successful, he or she must be flexible in how they deliver value to customers. For a free assessment on your business model and different ways to maximize your business valuation, please reach out to Brian/Scott at firstname.lastname@example.org.
Co-founders & Managing Partners