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As a business owner, you know what it’s like to lie awake at 2 a.m. Maybe it has happened when you are excited and full of new ideas for your business. More often, it’s because you are worried about issues you will face the next day. Sometimes, it’s because you just woke up with the solution to a problem. I’ve experienced all those emotions about my businesses over the years. Awake at 2 o’clock? is where I share them with you, and hopefully help with answers that will let you sleep.
John F. Dini
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Tag Archives: leadership
Companies Sell for a Multiple of…What?
Last week we discussed the difference between Main Street and Mid-market companies regarding their prospects for finding a buyer. You can read it here, but the short analysis is that the market is tightening for Main Street businesses, while the … Continue reading
5 Responses to Companies Sell for a Multiple of…What?
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One Response to Owners Live in Two Different Worlds
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There is no question about the difficulty in the Main Street market. Another strategy besides fading into the night is to find someone to pass it on to. That likely means finding someone years in advance, nurturing them and at some point starting to share equity. Having said that, I fully recognize that many small businesses are not in a market where a successor is easy to find. While I own a small software company, it is not so easy to find someone willing to start work at 3 AM so there are fresh bagels ready by 6 AM. Thank goodness there are such folks.
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The Toughest Part of Performance Reviews
There’s been some noise in the business press of late regarding large corporations’ decisions to eliminate performance reviews. Like those who have installed unlimited PTO (Paid Time Off) and other “new” management methods, review-less organizations are deemed to be more … Continue reading
7 Responses to The Toughest Part of Performance Reviews
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Annual reviews are a horrible idea. Can imagine getting feedback 12 months later after a positive or negative event – how does it help? It only slightly recognizes what occurred. We are now moving to quarterly reviews and one day to monthly reviews. In the book The Game of Work, by Charles Coonradt, teaches an excellent method of measuring the success of the employee and how to harness that success to mutual benefit both employer and team members.
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John,
Thanks for the walk down memory lane, great reminders… As I recall, the things in life that are worth amything are often difficult and a lot of work, not fun and easy.
jk
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I fully agree with the negative feelings about performance reviews and that’s why I wrote my book “Performance Reviews; The Bad, The Ugly, … The Alternative” (Amazon).
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An employee is responsible to offer three areas to his/her employer; 1. Performance, 2. (Mutual Respect to organization, fellow employees and customers) , and the, 3. Ability to “Think” as to how they can assist and help achieve the organizations charge. That is it!
A performance review, on a quarterly “update” basis, keeps the individual attuned and allows an avenue to resolve any issues that may be getting in the way of the best performance possible.
It works.
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Never Fire a Salesperson
The majority of business owners prefer linking pay to employee performance. The sales role in most businesses is the easiest and most obvious place to begin. Yet owners struggle with compensating salespeople in a manner that is affordable while still driving sustained performance. Building … Continue reading
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The Extinction of the Summer Job
I’ve read several articles of late discussing the decline in the number of older high school and college students that take jobs for the summer. Each of these reflected on how summer employment taught millions of Americans their first work habits. Around … Continue reading
2 Responses to The Extinction of the Summer Job
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Hi John,
Whoa, this describes the situation exactly (except I don’t know of any “middle class” folks that can afford summers in Europe)! As Chief Moderator at BizSugar, I feel your article hits home to small business owners the fact that most young people — not millennials, but generation Z, those who are about ages 15 through about 18–will be entering the job market with far, far less practical experience than even the millennials, let alone Gen X or the boomers, and this message may really deter them from giving these young folks a chance. As minimum wage jobs go up to provide underemployed adults with a means of providing for their families, perhaps it’s a good idea for small business owners to re-create those summer jobs of the past, by hiring a kid to scan some documents, run errands, do a little of this and of that and above all, get used to talking to customers and dealing with people. As a parent, I’d like to see this, but from the SMB’s perspective, they might not have the extra cash lying around after they pay the grownups.
Hmm….food for thought.
Right on target. Thanks for the article. Thought: The experts who have never bought oe sold a business,,, are they experts?
Good point, Jon. Some believe that their technical expertise in analyzing financial statements or drafting contracts is sufficient to handle a transaction. Too bad so many owners find out too late that isn’t the case.
Hi John.
If I am representing a buyer, we would look at the discounted cash flow of four year projected earnings, plus a terminal value, particularly if the buyer is using some debt to make the acquisition.
David.
David,
NPV of future cash flows is a reasonable way of calculating ROI for a buyer, but it would still translate into a number that needs to be compared against the industry data calculated in the more standard way.
Good article. The truth is that a business, any business, is not worth what the owner think is worth, and is not worth what the buyer think is worth; it is somewhere in between, but how do you convince both parties of that?