Your Company’s Most Important Asset in Challenging Times
Carter Schelling makes the case that an owner's creative entrepreneurial mind is the company's most important asset, with practical ways to protect it, focus it, and make time for it in a tougher market.
Full transcript
Generated from the episode audio and lightly edited for readability.
Good afternoon and welcome to Studio 3655. I'm Carter Schelling, director of business development for Martin Healthcare Advisors. For the last several years, I've been helping Paul create his terrific video interviews and presentations, and many of which were shot right here in this studio. I also run a consulting organization called 3655 Incorporated. And for the last 43 years, I've been helping my business owner clients create extraordinary companies in ordinary industries. Well, we're into the new year now and over the next few weeks, I'll be interviewing Paul Martin, Tom Carden.
Paul will be interviewing a couple of different experts to get you the information you need about how 2023 is likely to be different from 2022 in the rehab M&A marketplace. Now, I'm not one of those experts, but I would ask you to consider it would be prudent to see this coming year as more challenging than last year. There's going to be more sellers chasing fewer great deals. And that means you're going to need to really rely on your company's most important asset. And I'm going to share with you how my clients protect it.
Focus it on the right things and give it the time they need to do its magic. So, what is your company's most important asset? Well, in most seminars you go to, the seminar leader will say, "What's your company's most important asset?" And people will answer machinery or patents or and he'll say, "No, your people." And he's wrong. It's not your people. Let me give you an illustration. Let's say, God forbid, you're diagnosed with a brain tumor, but fortunately, it's operable. So, you schedule a brain operation with a brain surgeon, the best with the best team.
Okay? And you go in, you get wheeled in, you get set up, and in the morning, right before it's time to get wheeled into the operating room, you discover or hear that the surgeon has just learned that his or her spouse has left him and his kids for the gardener. Now, my question is, you got to go through the surgery. I would not. Okay? Because at that moment, it doesn't matter how good the nurses are. Your surgeon, the leader, has lost his or her mind and they're not at the top of their game.
So, it doesn't matter how good your people are if the leader loses his or her state of mind. So, your most important asset is your creative entrepreneurial mind. The things you can come up with that nobody else comes up with in crisis and in good times. So, I'm going to share with you what my clients do to really get the most from that most important asset. Starting with how do you protect your state of mind? These are stressful times. There is uncertainty. There's threats. There are challenges we've never faced before.
Plus, if you recall from a couple weeks ago, Dave and I were talking about how when you're preparing to sell your life's work, it's a very strange, disorienting time. It can throw you for a loop. You need to consciously protect your state of mind just like an athlete protects his or her physical strength. And there's some routines you can use to do that. Starting with write down a list of all the things stressing you. It may seem obvious. Well, of course this and just trust me.
Write them down one by one. And next to each one, put what are the possible even partial remedies for each. So you got the problems and the possible partial solutions. Write them down. Number two is think of the things that make you strong. Is it exercise? Is it rest? Is it meditation? Is it the proper nutrition? Is it spending time with your kids? And schedule those things consciously like they're medicine. You need to strengthen your system to resist the influence of these extraordinary stressors. And then finally, keep the future by your side.
You're doing this for a better future. Keep visualizing it in Technicolor 3D. So that while you're strengthening to be able to survive the stress, you have a partner. And the partner is why you're doing it, what you're doing it for. Second thing, to get the most out of your most important asset, you got to focus it on the right things. You know, the famous management guru Peter Ducker once said, "Success does not come from doing things right." Really? No. Success comes from doing the right things.
Ah. Ah. So, you have to ask yourself if 23 is different and more challenging. What do I have to do in 23 differently? Because I can pretty much guarantee you that the best possible deals in 23 are going to go to owners who work harder and especially more creatively than everybody else. Will that be you? And where should you focus that amazing creative entrepreneurial brain of yours? Number one, you should focus it on making sure you have more information than your competitors about what the heck is going on out there in the marketplace.
Not last year, not 10 years ago, not in your imagination, but for real, you have to track down sources of information about what's really happening out there with the acquirers so you have that advantage of knowing more and knowing more as it applies to your opportunities. The second thing you need to do is to keep asking yourself as the market constricts and deals get harder to do. What do you really want when you've sold your company? What do you want to have? What's most important? I know what you dream of, what you'd like to have, but what must you have in terms of amount, the time when you get it, the structure once you get it?
Because you're going to have to make tough decisions. I guarantee you that there's no easy decisions this year. You're going to have to decide, do you want to hold them or fold them? Do you want to keep it or join a larger partner based on what's most important to you? Number three, as I've said it before, your ability to grow after the sale is very powerful when it comes to an acquirer's evaluation of whether they take you or someone else. You have, if you followed my request, a plan for growing after growth.
What's limiting it? You know what I found in 43 years? Most limitations of any company are tied to either what the owner won't do or what he or she won't think about. What's limiting your growth after the sale? Is it someone you haven't hired? Maybe you can't afford them right now, but do you know who you would hire if you had the money that would accelerate your growth? Is it someone you haven't fired because they're your brother-in-law or whoever else? When will you fire them and remove that obstacle to your growth after the sale?
That's worth focusing your creative entrepreneurial mind on to get the best possible answers so you can show up for acquirers as having the best possible future. Third thing, there's a lot of tasks in one and two that you haven't been doing in 22. And you've got to develop and find the time to do them. You've got to give your creative entrepreneurial mind the time to do its magic. And right now, I claim you probably aren't giving it that time because you're doing other stuff. You're busy.
You're very important. And all the things you're doing are important. They just aren't as important as what you must do to get the best possible deal in an increasingly challenging marketplace. How do you make the time? I want you to make up another list, a list of all the things you do. Limit it to about 20 things. And then pick out the things no one else will ever be able to do. And if you got hit by a truck tomorrow, they would just not get done.
And then take what's left and divide it into three categories. What are the things that somebody else could do? They wouldn't do them as well as you. Oh, no. But they do them well enough for us to be successful. What could they do right now? Second of all, what things could maybe other people do after you gave them 30 days of training? Once again, they wouldn't do them as well as you do, but they'd probably be successful enough that you can back away from those things and invest that time in your most important asset on the right things.
Three is what about after 90 days of training? You know, you may be in this market for a big chunk of this year and you've got some time if you start now to develop certain people to do certain things because as you get closer to the sale, you're going to be spending more time on the sale and getting the best possible deal. Right now, you should be talking an hour a day minimum, pushing it to two hours a day. I know. Oh my gosh, where would that come from?
It comes from this list. If you're serious, you don't try to do things right. You make sure you make the sacrifices to do the right things. Let other things get done well enough to support the most important things. So, we're going to be with you through this challenging time, but I'd like you to keep these things in mind because your mind is your company's most important asset in challenging times. Let's have a conversation about this. Put your name and email down below and let me know.
Makes sense, doesn't make sense. Would you like to expand this conversation? Include Paul or Tom? Let's start the dialogue. Thanks for your time today and I'll see you next week.
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