by Doug Robbins,
FCBI, M&AMI,
CM&A, MCBC

There are many things that go together to make a good leader. Such things as knowledge, vision, personality, financial capacity, education, experience, compassion, firmness, intelligence, communication skills, persistence, passion, self discipline, self starter, self confidence, self esteem, etc., etc.

This article will deal with vision and how to obtain a long term vision for both your business, and yourself.

Operating any business today is far more challenging than even 10 years ago. With the exploding growth in  knowledge, new technologies, discoveries in virtuously every field,  the world as we know it is changing at a fantastic rate; far too fast for any one person to keep up with.

Changes in our laws, in taxation, rules and regulations in most areas of business are simply more than anyone person can be reasonably expected to stay on top of. Then there are changes in equipment, software, production methods, off-shoring competition, new sources of supply, new products, new ways of manufacturing, and the list of changes go on and on and on.

One of the most effective and inexpensive ways to address the huge changes affecting businesses today is to establish a board of advisors. The advisors, drawn from many different disciplines, can bring much intelligence to a small business making the difference between success and failure, profits and also-ran businesses.

I know a midsized business owner (revenues about $50,000,000) who had nurtured a group of business owners with similar sized businesses from around North America. All the businesses were in different fields of endeavour, but at that size, business operations, accounting, taxation, law, marketing, advertising, employee issues are all similar. There were nine people in this group who meet 4 times a year for an average of three days each time. Each paid all their own expenses, took turns hosting and never charged each other for their time. They shared financial information, product information marketing information, nothing was held back. This business owner said he never left a meeting of the group in which he hadn’t come away with significant ideas to implement in his own business and that all the other owners felt the same.

Not every business owner has revenues of 50 million, but every business owner knows the meaning of ‘it is lonely at the top’.

The automotive dealers are very strong on advisory boards and most dealers belong to a dealer group. These groups are made up of approximately 12 to 15 dealers, from the same manufacturer, but all from different markets. The ‘different markets’ part of these groups has been significant part of the structure of these groups, so that there is no concern amongst the dealers about competition amongst themselves.  These groups then share amongst themselves the most intimate of operating details and are designed to assist each dealer to be aware of all aspects of their business as compared to the peer group they are a member of.  All of the financial results are then pooled together to create a series of standard operating results that they can then compare themselves to.

Most progressive franchise companies now offer “group programs” to their franchisees so that they may learn from one another to improve their operations.

Many small independent business people are joining or forming “groups” of business people with similar seized businesses from different business segments (to avoid competitive issues), to learn better business practices from each other.  These “groups” usually meet 6 to 8 times per year for a full day and often bring in outside speakers on topics of mutual interest to the group.

When creating a business plan I like to break the planning process into three distinct activities.  I refer to this as “The Robbinex® 10/5/3 Planning Program©”.

The first activity is setting the Ten Year Vision.  What will the company be doing in 10 years;  what products or services will it be selling; how many locations will it be operating from; how large will the ideal facility be; what will the employee makeup look like; etc?  Once the 10 year vision is clearly established, we then sit down and develop a five-year business plan to determine the goals that will need to be met if you are to have any opportunity to be successful in achieving the 10 year vision.

The Five Year Goals are clear goals and objectives that will be expressed in five distinctive financial business plans, one for each of the five years, with supporting documentation with respect to capital equipment acquisitions, marketing initiatives, product development, territory expansions, acquisitions, employee development, etc.,  all put onto a timeline that is expressed in the  financial projections summarizing how the company will achieve the five year goals that are to be reached if you and your company are to realize the 10 year vision.

The third and final step of the 10/5/3 planning program is to complete a Three Year Business Plan; the first year of the business plan will be completed on a month by month basis, line by line, with years two and three being  done on a quarterly basis.

The first time someone initiates the 10/5/3 planning program, they should allow approximately 3 to 4 days of concentrated effort to be sure and cover all aspects of the process. This does not need to be accomplished in three or four consecutive days and could easily be done over three or four week period provided adequate and uninterrupted time is set aside. 

An important part of this process is to be both detailed oriented and to be forward-looking. You must remember that this is a learning process as well as the planning process. Consequently the first-year business plan needs review reviewed on a monthly basis; actual results against plan; and it's quite likely that at the three months or six months, it will be necessary to revise the plan to reflect reality of what is actually occurring, and is likely to occur for the balance of the year.

The value of “The Robbinex® 10/5/3 Planning Program©”will most likely not be realized until well into the second or third year because research, planning, and implementation requires time to see the desired results and this usually takes more  time than initially envisioned.

One of the most important parts of the 10/5/3 program is the requirement that the process be repeated on an annual basis with an appropriate amount of time allocated for each planning session. The long term value of the 10/5/3 planning program will gradually be realized as  you move into years three and four and five and recognize that the 10 year vision is actually changing, albeit very gradually.  Your accuracy in planning will also improve as the years progress and you'll be pleasantly surprised at how close the results achieved will be against your forecasts. In my business we are closed between Christmas and New Years, and I generally spent 6 to 7 hours for each of 4 or 5 days to update my 10/5/3 program.

It's highly likely that a 50-year-old will have a different vision of where he will be in 10 years that he will have when he turns 60 or 65. There's no doubt the technology will change, competition will change, markets will change, products will change, and employees will change, to mention only a few changes. The only constant today is change, and these changes need to be implemented into each of the three parts to achieve the 3 year plan; to reach the 5 year goals; to realize the 10 year vision.

The following is a true story about someone who did everything the way a business person ought to. He searched and sought out competent advice when he wasn't sure. He surrounded himself with both an advisory board and competent employees, and always looked out from three to ten years.
In 1983, we sold a very small niche manufacturing business to a marketing executive by the name of Tom, that had sales of only $350,000. 

Tom came back to us in 1990, having increased the sales to $3 million, indicating he was ready to sell. Our Comprehensive Business Analysis revealed a very bright future for his product and business. We strongly urged him to create an advisory board, do some in-depth research on equipment and his markets, particularly in the United States. He and his advisors then completed a business plan which indicated to him at the future was indeed quite bright, if he changed direction.

He returned in 1996, with sales of $7 million and said, “I am now ready to sell my business”. Once again, a Comprehensive Business Analysis was completed.  I then asked him when he last had a complete personal physical examination. He looked at me strangely and asked why? I indicated to him at his age (60) that I didn't want to encourage him to keep his business if his health was weakening or not strong.  About four weeks later he called and said his health was very strong and when could we get together so that we could share what we learned about his business.
 It showed that there was a significant shift in the marketplace for his product lines and new technology was available which would make him more productive and allow him to enter a new emerging market. He would need to acquire about $1,000,000.00 worth of new manufacturing equipment which would both expand the line of products he could make and would significantly reduce operating costs. Again, he decided to keep his business.

 In 2006, I called Tom to suggest perhaps it was time for us to sit down and talk about him selling his business.  After all, he was now seventy years old and perhaps he should now start the process to put his affairs in order. There was a long pause; he said “I don't think you understand: I followed all the advice that you've given along with the advice of my advisors; and I have surrounded myself with good people; I now work only six hours a day and only work three days a week; and am only in the office only one of those three days; and furthermore I now take six months vacation every year; my sales last year  were 18 million and I kept almost 2 million. Why would I want to sell my business?”

He went on to say that he was quite appreciative of what help he had received over the years and wanted me to know that I was named in his will!  I became quite excited, … for a  moment, and he went on to explain that his executor was instructed to call our firm to sell the business when he passed on.

Copyright Robbinex Inc.  All rights reserved.  Doug Robbins, President and Founder of Robbinex Inc. has been assisting mid-sized privately held business owners with exit and succession strategies since 1974.   www.robbinex.com  Doug can be reached at 1-888-ROBBINEX or doug@robbinex.com