Why building a high-value business is just like gardening...26th June 2019
My neighbour, Lance, has the most incredible garden.
Every summer, I watch with envy as he tends row after row of colourful vegetables and herbs.
Working slowly and methodically, Lance tends his harvest until it overflows.
Fortunately for me, he’s always willing to share his bounty.
One year, I finally summoned the courage to ask how he’s able to garden with such success.
His answer: Plant, water, weed, repeat.
“That last step,” he explained, “is the key to the whole system.”
The same could be said of creating a valuable business.
As I explained in my last article, here’s how we do it at Insight Associates:
First, we develop your strategic vision, so it’s clear exactly what kind of company you want to build.
Next, we give you the financial infrastructure you need to build that company.
And last, once your company’s finances are managed smoothly and efficiently, we use your financial data to help you make better strategic decisions, so you can develop your dream company even faster.
The result is the kind of business that meets your personal and business goals….
Which runs like clockwork (even when you’re not there)….
…And which has objective value, because it is depends on systems, not on you - giving you a profitable exit strategy when you’re ready to move on.
But in fact, there’s a fourth step to this process…
…One I didn’t mention last week.
You see, once we’ve been through it once, we reach the most important part: Repeat.
We go right back to the beginning, and go through the whole process again.
Because it isn’t enough to establish effective internal financial systems once.
You must revisit them repeatedly as your business grows, constantly tweaking to make sure they are fit-for-purpose and add value.
Just like a growing garden, a maturing business evolves and changes over time.
So your vision for your business – and how it serves you – might change, too.
Mine certainly did!
Remember how I told you a few weeks ago that I recently bought a house in Wales? This means I’m moving from a vision of a business where I’m on-site and hands-on every day, to one that allows me to work remotely for extended periods of time.
As your vision changes, and as your business grows, you’ll need different financial infrastructure in place.
The systems you established to handle 1,000 orders a month a couple of years ago – which at the time seemed so ambitious – are now too small.
The financial reports you set up last year no longer give you the information you require.
And so on…
So you need to continuously tweak.
Now, as your business begins to become much more established, and you start to experience continuous growth, you might be tempted to set cruise control, sit back, and watch the money roll in.
Refining all the processes you already set up might not feel like a priority.
But as we discussed previously, high profits are not necessarily a sign that your business has high value.
It’s your systems - the same ones that keep your business running smoothly - which give your organisation real, lasting value.
So if you want to continue building that value, you have no choice. You must continue refining those systems over time.
It’s a cycle - You cannot “set and forget”, any more than my friend Lance could “set and forget” his garden, and expect the same bounty of produce each year.
That’s why, if you don’t have solid financial processes in place for your business yet, it’s not too late.
Good businesses continually re-examine and refine what they have in place.
Take the first step towards building yours, and creating the high-value business you dream of, right now.
PS. How well are your current financial systems serving you and your business?
Watch out for my next email, where I’ll share a simple 30-second test that will help you answer that very question.