CEO Advisor Newsletter December 2013
Ten Major Issues for CEOs
According to Inc. Magazine, only one in 10 companies make it to the fourth year in business. Most companies that survive this fourth year are eventually sold or liquidated. Only 1.5 percent of all companies survive into the third generation of management. Why? It is primarily due to a lack of strategy, business planning and execution.
A successful business is built over time by a CEO or business owner who is able to assemble a focused management team that produces quality products or services. Then, the business must create a sales and marketing machine coupled with operational processes that generate profits consistently. This requires strategic planning and skilled execution.
Why do most companies fail to survive the first generation of management? Usually something happens that causes the entrepreneur to leave the business or exit the business prematurely.
Here are 10 key issues that typically lead a CEO or business owner to decide to exit the business, usually through a sale or liquidation, at less than desirable results.
A successful business is built over time by a CEO or business owner who is able to assemble a focused management team that produces quality products or services. Then, the business must create a sales and marketing machine coupled with operational processes that generate profits consistently. This requires strategic planning and skilled execution.
Why do most companies fail to survive the first generation of management? Usually something happens that causes the entrepreneur to leave the business or exit the business prematurely.
Here are 10 key issues that typically lead a CEO or business owner to decide to exit the business, usually through a sale or liquidation, at less than desirable results.
- Lack of Operating Capital - No cash reserves to meet short-term cash situations. Also, cash shortages preclude funding essential business growth strategies. Serious cash needs can cause short-sighted actions.
- Management is Too Thin - The CEO is so tied to the business that there are no resources for the CEO to share management responsibilities. Thus decision-making, sales, marketing, operations and growth are restricted to the CEO's abilities and available time.
- There is No Succession Planning - There is no training and grooming of a potential trusted successor. And, there is no active plan or resources to recruit from the outside if an internal candidate is not available.
- Managers have No "Ownership" in the Business - Senior managers are vulnerable to outside offers when they have no real economic ties to the business. Equity incentives or management bonus plans can generate a vested interest in business performance or solid, committed succession.
- A Specific Business Strategy is Lacking - There is no strategic business plan and financial forecast or goals to focus resources effectively toward results and to increase profits. This is critical and rarely done consistently in small business today.
- The CEO Dies or is Disabled - Being prepared for the calamities that can ruin a business is a responsibility a lot of business owners do not take seriously enough. Insufficient financial and management preparation for the death or disability of the CEO can create chaos for those left to sort out the issues. A trusted business advisor familiar with the business can be an extremely valuable resource to any CEO or business owner.
- There is Disproportionate Risk through Personal Guarantees or Expenses Tied to the Business - Because of personal financial guarantees required for the business or considerable fixed expenses, a major crisis could ruin the business owner.
- Family and Other Ownership Issues Exist - Family succession, majority shareholder issues including divorce, the death or departure of a shareholder, or event conflict between shareholders often cause an exit decision. More often than not, decisions are made with more emotion than reason. A business advisor can assist in sorting out the varied interests and prepare viable alternatives in advance.
- The Business is No Longer Enjoyable or CEO Fatigue Sets In - Many CEOs and business owners reach a point where they no longer wish to endure the pressures of the business. They have lost their enthusiasm and commitment. This condition is not only an impediment to growth, but it often creates a downturn in the business that puts the company in a vulnerable position. An interim, part-time CEO/business advisor may be the alternative that works best outside of a sale of the business.
- The Assets of the CEO or Business Owner are Unbalanced - Most personal assets are in the value of the business. Little independent retirement savings have been established for the CEO/major shareholders in the event of a business downturn. In the absence of a strategic exit, the sale of the business is required as a retirement alternative.
CEO Advisor Advises Reynard Corp. on Sales Strategy and Growth
- CEO Advisor,(www.CEOAdvisor.com), a leading business advisory firm serving the needs of CEOs, presidents and business owners of small and mid-size companies is providing sales strategy and business growth advisory services to the CEO and President of Reynard Corp. (www.reynardcorp.com), a leading provider of custom optics and thin film coatings for military, defense, aerospace, imaging and other markets.
- CEO Advisor provides business advisory services affordably and effectively with hands-on work performed to CEOs, presidents and business owners of small and mid-size companies on growth, business strategy, sales, sales team building, sales strategy, marketing, operations, finance, funding, mergers and acquisitions to grow businesses to the next level. As a trusted CEO Advisor® to business owners since 2004, the firm specializes in providing business consulting services in a one-to-one advisory role on a weekly basis to maximize sales, profits and a return on its client's investment, while ensuring progress every week.
- Mark Hartsell, CEO of CEO Advisor, Inc. states, "Reynard Corp. provides highly specialized services, and an unmatched level of expertise. CEO Advisor is providing hands-on advice to further accelerate growth and implement a sales strategy to grow the business to the next level."
- Randy Reynard, President of Reynard Corp. states, "CEO Advisor is exactly what we needed at this phase of our growth. CEO Advisor's focus, expertise and hands-on approach enabled us to achieve the needed changes we were looking for in a timely manner."
- About Reynard Corp.
- Reynard Corp. is a global manufacturer of custom optical thin film coatings. For over 25 years, Reynard Corporation has been a premier supplier of custom optics and thin film coatings to the military, defense, aerospace, imaging and instrumentation markets. Reynard focuses on manufacturing the highest quality products with excellent customer service by building relationships with our customers and understanding their optical needs. For more information, contact Reynard Corp. at (949) 366-8866, or visit www.ReynardCorp.com.
- About CEO Advisor, Inc.
- CEO Advisor provides business advisory and consulting services affordably and effectively to meet the specific needs of CEOs, presidents and business owners of small to mid-size companies in a wide range of industries, including technology, professional service firms, light manufacturing and many more. CEO Advisor's mission is to advise business owners with the needed expertise and focus, coupled with hands-on advice and work performed to grow your business to the next level.
- Contact Mark Hartsell, CEO of CEO Advisor, Inc. today at (949) 629-2520 in Orange County, CA, by email at MHartsell@CEOAdvisor.com or visit us at www.CEOAdvisor.com for more information.