Lessons in Entrepreneurship – What Does It Mean to Be ‘All In’?

At lunch the other day, a friend and client was talking about her company and made the comment, “Jim, I’m all in.” I must have had a quizzical look on my face, because she quickly explained, “If this doesn’t work, I am in trouble…personally.”

Several days later, I heard the same statement again from another entrepreneur/client whom I respect and trust. He also owns his own business and has invested all of his time, energy and personal assets in his company’s success.

“Jim, I’m all in.”

Those words resonate deeply. On the surface, they communicate personal commitment and focus. But is there more to the phrase, “I’m all in” than commitment and focus?

An “entrepreneur” is someone “who organized and manages an enterprise, especially a business, usually with considerable initiative and risk.” The term “enterprise” means “a project undertaken…especially one that is important or difficult or that requires boldness or energy.” Dictionary.com

While those definitions may be sufficient to describe what an entrepreneur does, it only hints at why a person would take on a project that involves “considerable initiative and risk.”  There is something else at play here; an intangible force that compels someone with an idea or service to do whatever it takes. That something cannot be measured or quantified. But you know it when you see it.

It is the underlying motivating force behind the statement, “I’m all in.” All successful entrepreneurs have it. Everyone else wants to enjoy their success but may not share that same devotion. What is it?

Passion.

Passion is what carries you forward when all the data screams that you should give up. Passion is the quest for something greater than yourself – the knowing that your efforts will benefit many, even when it seems impossible. Passion is that undefined “extra” that you know to be true even when no one else believes in you or your mission.

Passion Without Processes is not Manageable or Scalable

Why do some businesses thrive while the majority of small to medium companies flounder or eventually fail? Was the initial idea flawed or is something else at play?

Even the greatest, most innovative ideas can get stuck in the execution. The quality of the idea is one factor; the processes and scalability of the execution is an entirely different consideration.

To be an effective entrepreneur, your passion has to be sustainable. To be sustainable, the business must have processes and systems in place that manage five critical areas of the enterprise:

• Conflict/Risk Management – what are the risks/rewards for customers, vendors? What about pending or threatened litigation – is it a one-time event or a symptom of a systemic problem?
• Contract Review – are standard terms used in contracts that protect the company’s intellectual property interest and other interests? Is there a consistent contracting process that involves sales, operations and finance?
• Human Capital – are management roles aligned with the compensation model and business objectives? Is there an exit or succession plan in place for key executives? Is the company protected if key employees leave?
• Finance – are current financing terms consistent with business model? Are there audited financial statements and accurate reporting of finances for internal, investor and external use?
• Corporate Governance – are management roles aligned with owner objectives? Is there an effective Board of Directors composed of valuable advisors?

When one or more of these areas are not effective or efficient, it impacts the entire organization. Without systematic processes surrounding each of these critical areas, more money, time and effort are required to resolve conflicts and maintain momentum.

Implementing processes takes time. You probable spent years bringing your passionate idea to the marketplace. If the success you now enjoy is not up to your expectations, there is probably a system of process in one of the critical areas that needs to be analyzed, revamped or strategically managed.

The Bottom Line

You know you are an entrepreneur when you commit all of your time, talent and energy to your passion. But to be a successful entrepreneur, you have to be “All In.” Surround your passion with proven, time-tested methodologies and systems to ensure success.

Jim Shields is the founder of Shields Legal Group, an innovative law firm focused on helping private middle market companies, capital managers and investors improve their processes and systems to achieve the highest profit and valuation. In the role of Outside General Counsel, the Firm advises Companies in their Growth to Exit planning by focusing on strategic business objectives and implementing best practices. Shareholder value increases, as well as overall enterprise worth.

              Your needs. Our approach. Your business is our priority.

 

Is Your Business Ready to Sell?

How to Position Your Business to Sell

You spent a lifetime being successful in your chosen field or industry. Through trial and error, you learned how to monetize your business and brand in the marketplace. Revenues and profits are stable and you may be thinking about the next step for your company – either succession to the next generation or a liquidity event.

You Know How to Make Your Company Successful; Do You Know What it Needs to Attract High Valuation?

The skills, expertise and knowledge required to start and build a business are well-known. You analyzed the market, developed a product or service to meet the needs you identified, then you took deliberate, calculated steps to bring that service or product to market. The focus of your efforts was on growth, market expansion and profitability.

But what private investors or capital managers look for in their next investment requires a different approach.

It normally takes 1-3 years of focused, deliberate attention to groom a company to withstand a stringent due diligence review by a potential investor or buyer. During this transition stage, a different mindset and perspective are crucial to the ultimate goal of a liquidity event or succession to the next generation.

The Transition Stage requires a Focused, Deliberate Process

When your company is in the transition stage, the goals, focus and strategies are different from the growth phase. It makes perfect sense, because you are now moving toward a new destination.

You should be as methodical and strategic in the transition process as you were during the growth and expansion of your business. When you use time-tested, proven methodologies to ensure that your business is ready for a due diligence review, you, your shareholders and your successors will reap the rewards.

Five Critical Areas Inside Any Company that Should Exhibit Best Practices

Any business, no matter what the focus or industry, has five critical areas that support the business model. If any of these areas are not running effectively or efficiently, it can impact the overall health and viability of the company. The five areas include:

• Contract Review/Processes
• Finance & Reporting
• Corporate Structure
• Human Capital
• Conflict/Risk Management

When a prospective buyer conducts a stringent due diligence review before making an offer, if one of these five areas are substandard, it directly impacts the value placed on the entire company.

For example, a potential buyer will automatically devalue a company if it does not have professional financial reports available. If there is a lack of consistency in the sales process, a potential investor may not have the same confidence that sales will continue after a capital injection. If there is a pattern of claims or lawsuits from vendors or customers, succession of the company to the next generation is jeopardized.

By introducing best practices in these five areas, inefficiencies are reduced, scalability increased and consistency in performance assured. Stability, consistency and growth are the end results, which directly impacts value.

Doesn’t your life’s work deserve the effort necessary to transition to the best and highest result?

 

JAMES D. SHIELDS – After more than three decades practicing commercial business litigation and representing entrepreneurs in every stage of their business, I have come to the conclusion that it is not just what you know, but how you apply it.  Strategic planning, creative problem solving and a deep understanding of business in general and yours in particular are the pillars of Shields Legal Group’s professional services. Our unique Growth to Exit service for companies and investors planning a liquidity event or succession to the next generation could be the guidance you need to transition your company.

To learn more, please visit ShieldsLegalGroup.com.