CASE STUDY I recently was referred to a business owner by one of my clients. At my first meeting with this business owner, he expressed how absolutely fed up he was with his business. The dream of a successful business had vanished for him. He informed me that he had already gone back to a full-time job with his former employer working for this airline on the graveyard shift as a mechanic. Not a job he wanted, but it paid the bills.
Throwing of the Wrench What transpired was an accident by a subcontractor who did not have insurance while working for him. This subcontractor threatened to hold this business owner liable for the accident. Medical bills, pain, suffering, attorney's costs, and the insurance issues all lead up to him being overwhelmed. After struggling with the business for 8 years, this event was the final wrench that was thrown in the gears of his business and his dreams of having a successful business,
On the advice of his legal counsel, he was advised that his subcontractor agreements did not meet the IRS guidelines for a subcontractor relationship and he would be held liable. On this advice, he should make a settlement payment. Fortunately, the subcontractor released the business owner from this liability with a financial settlement.
Under this pressure, he decided to get small again. The business owner continues to serve his existing customers himself after releasing all other subcontractors. He works this business in the day and the full-time job with the airline as a mechanic at night.
He has stopped answering the phone for the business while his current customers continue to refer new clients to him. In his words: "I just can't take it anymore. I want out. I want to sell." The fear of continuing to run the business has overwhelmed him.
Decisions of the Business Owner Did his dreams of a better life and a great business have to end up this way? What drove him to not seek help and to continue to defend what he really didn't know? Was it fear, pride, greed, inability to communicate, pressure, lack of knowledge, thinking that it cost too much to seek help? Most likely was some or a combination of all these factors? He revealed he did have an informal coach, which was actually another business owner with a similar business, running that business the same way. Not too successfully either, he mentioned.
This business, as with all small businesses for that matter, is the sum of all of the decisions of the owner. 10 examples of the decisions he made includes:
- Having actual employees is a bad thing!
- Hiring good employees is impossible!
- Not ever wanting to have a payroll!
- Paying worker's compensation insurance would never work for his business!
- His pricing could not be changed!
- He could never put together a budget for his business; it's just not for him!
- Planning just would not work!
- Legal services are to be used only when you're in trouble!
- I know what I am doing and if I work hard producing for my customers, everything will work out!
- I just can't find good people!
- I can always trust the advise from another business owner!
- Just to name a few!
Selling the Business? Naturally, this business owner wants to sell his business for the highest amount he can get for it. "So how much is it worth?" he asked me. How much will the market (buyer) be willing to pay him for this business?
Some quick research revealed that most businesses in his market space are selling and in some demand. This business owner made a small profit for 8 years, but in retrospect did he really have a business? What does he have to sell?
After our discussion, he realized that all he has to sell is some equipment and a list of clients / prospects. Not much after 8 years of hard work. If he is very, very lucky he might get a buyer to pay him a small amount for the equipment and some goodwill. This ending was not at all what he had dreamed. How unfortunate.
Was he disappointed? YES. Did it have to end-up this way? Absolutely NOT.
Leading your Company It was too late for the business owner to save the business in this actual situation above. He had already given up. However, if you're under some pressure from your business you still have the opportunity to build a great business and the life a great business creates for you and your family.
There are many lessons that can be learned from this unfortunate situation. Could this business owner have changed this outcome? Would this outcome be different if some of the decisions made by the owner had been different? Is the business a reflection of the owner's thinking? The answer to all the above is YES.
ThistleSea's business coaches work with business owners everyday to help them to improve the performance of their businesses and the business' value. We offer a Business Effectiveness Evaluation that can help pinpoint your business' strengths and weaknesses in order to develop an action plan for improvement. This plan provides a road map of small steps you can take each day to help you achieve your dreams for your business, leading to a great life.
Isn't it time you sat down with ThistleSea Business Development. Invite us in for a discussion. Call (724) 935-1930 to set-up your free meeting with a ThistleSea Licensed Professional Business Coach. I encourage you take action today!
By John D. Laslavic, LPBC , Business Coach / President, ThistleSea Business Development, LLC
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