The recent announcement of Pope Benedict XVIís resignation has captured the imagination of much of the world. Benedict cited age and poor health as reasons for his decision. Why is this relevant to business owners?
First is the importance of physical endurance and stamina to the operation of a business. In some ways, good health and high energy are more important to the smaller firm than to the larger company because there are fewer people to pick up the slack. Lack of energy may show up as illness leaving an owner unable to show up at work. However, that tends to happen after the problem has moved from low energy to actual ill health. The effects of low stamina show up long before that in reduced enthusiasm, reduced interest and reduced leadership.
Second is understanding how difficult business leadership is today. Competition is everywhere: down the street, across the world, and through the Internet. Profit margins are tighter, risk is greater, and the effects of stress are more intense. Itís no wonder business owners feel burned out after just a few years.
Letís be clear Ė Iím not talking about age. Iím talking about energy and enthusiasm. Iím talking about the passion that gets us up in the morning and fuels our actions. Itís more involved than regular physical exercise intended to improve physical conditioning and build physical energy. Passion requires mental, emotional, and even spiritual conditioning. Without it, our business suffers, and life is certainly less fun.
Ralph Waldo Emerson recognized that good health was essential to prosperity when he said, ďThe first wealth is health.Ē And that brings me to another reason for business owners to pay attention to their energy reserves Ė the exit value of their business. The image of the sports star who hangs on too long is almost universal. Few athletes go out while they are on top. The same is true of independent business owners.
If an owner wants to realize the maximum economic value for his business, he must sell before he really wants to. A business has maximum value to a buyer when it is still on the upswing. Once it starts downhill, the selling price goes down even faster.
An owner who holds on past the time of peak energy and commitment is almost certainly driving down the value of his business. The value reduction will show up in many ways. Among them are obsolescent equipment, reduced maintenance of premises, failure to continue investing in staff training, shopworn inventory, failure to keep marketing and advertising up to date, and the list goes on.
Perhaps you are not ready to step down, but you feel a responsibility to preserve business value. Moving your business to the next level and treating it as an investment is an option. Think of your business as an investment, and do all you can to increase value. Redefining your focus to higher-level management duties can preserve energy and reshape the direction of your passion. Build a business that doesnít require your every moment, sapping your interest, energy, and enthusiasm, and you will have a more valuable business and a more fulfilling life.
How will you handle a decline in energy and passion?
Bowser@BusinessValueInsights.com. Dan Bowser is president of Value Insights, Inc. of Durango, Chandler, Ariz., and Summerville, Pa.