Which End Of The Rainbow Is Your Pot Of Gold?

“It`s a good thing that when God created the rainbow he didn`t consult a decorator or he would still be picking the colours.”

For most business owners, the development of their business is both a thrill and, on occasion, a considerable stress. The journey to creating a successful company can take you in various directions and up many dead ends. This is the very nature of business - often learning from our own mistakes and being able to persevere through the tough times and move on forward.

Even if, from the outside, the business seems like an overnight success, closer examination often reveals this is rarely the case. I have seen some phenomenal successes in the ECM / Information sector and have had the enormous privilege of working alongside so many of these business owners, taking them to a successful exit. However, if business owners / shareholders spend years journeying to the end of their rainbow, only to discover that the pot of gold is at the other end, it can be very disappointing. It is truly a crushing feeling to have weathered the rain and the storms only to find very meagre reward at the end of your journey.

This scenario very often comes about through lack of an Exit Strategy and a predominantly inwardly focussed view of the world. So many regard the final exit from their business in a timeframe created only through their revenue/profitability forecast. There are many other factors that will affect that final exit. Value is a series of layers within the business but also, and very importantly, it is dependent on outside factors, such as current market opportunities, market drivers and trends. Too often, these elements are overlooked or they are based upon incorrect or outdated information.

When creating an Exit Strategy or when looking to acquire, the Board of a company needs to have accurate and current information on the industry rather than a myopic view of the world. Decisions made - or not made - based upon the wrong factors or outdated information are a major factor in M&A failure.

There should be no embarrassment in this lack of knowledge. Why should the owners of a business be fully informed in these matters? Their attention has been focussed on the clients and the profitable growth of their company. However, this does not negate the importance of ensuring that decisions regarding timing are being made with 20/20 vision and not some irrelevant, arbitrary timeline that does not take into consideration any of the above factors.

Enjoy the Colours of the Rainbow

Putting the above important considerations to one side, it is also important that, whilst building the business, it should not all be about the end reward, no matter how important. It’s also important that you enjoy the journey. Or, to carry my analogy further, it’s important to enjoy the colours on the way to the end of the rainbow.

There is a saying:

“The work will wait while you show the child the rainbow, But the rainbow won`t wait while you do the work.”

I have personal experience which leads me to draw the conclusion that, on occasions, it is better for you and the business to take time to step back, admire the view and the colours of the rainbow. Don’t be so intent on finding the pot of gold that you forget to appreciate the rainbow.