Two Red Dot Metaphors, One Better Business
In many ways, hotel rooms can be the great equalizer. Unless you’re staying in the presidential suite, we’re all saddled with the same uncomfortable beds, sad mini-bar and unreliable internet. But there’s something else essential you’ll find in every hotel room – even the presidential suite – and that’s the hotel guide on the back of the door. And what’s on that guide?
A little red “you are here” dot and your path to the nearest exit.
It’s a tiny representation of your location in relation to the fire exits and it can be a great metaphor for most business owners. Where is your business in relation to an eventual exit?
We are all little Red Dots but, without that fire exit guide, it can be hard to know where we are on the map or how to find the best route to our goals. Even if you understand the layout of the building and you know how close you are to the stairs, you’re still without the big picture of exactly where to go and the best way to get there.
Thinking about the location of that Red Dot and planning your business exit guide is a great mental exercise. It forces you to be honest about where you are today and where you sit in relation to your goals – whether that’s to significantly scale the business, franchise the business, pivot the business, or sell the business to internal or external partners. Whatever your goals, it’s smart to face current reality and define where you and your business are now (good, bad and ugly), where you want to go with the business (your vision), and the right path for you to get there (your plan). It’s also an opportunity to consider working with a business coach or professional advisor who can help you take a step back to face those realities and gain greater clarity to plan for the future.
There’s another way to look at Red Dots: Visualize a circle with a dot in the middle. Most business owners are that dot and the circle is their business. They are at the center of their business, nowhere near a profitable exit door, whatever that goal might be. They are in the weeds. The trenches. The minutia. They are at the center of every transaction, decision and problem of that business. Everything depends on the owner...they sadly are the CEO (Chief Everything Officer) and it’s exhausting. Instead of building a self-managing business, they built themselves an owner-dependent business and that’s a heavy burden to carry every day, every week, month and year.
That makes for a business that can’t grow, can’t be franchised and certainly can’t be sold, or for not much. There’s no money to be made in buying a business that depends entirely on the original owner.
If this sounds eerily familiar, then this is your wake-up call. You need to have an actionable plan to get out of the center of the business and to deliberately move to the outer edges of the circle. From the very edge of your circle, you can either sell the business for top-dollar or simply keep owning the business, a creation of successful systems and personnel working well together to get predictable results, and enjoy the auto-pilot business from the perspective of a non-operational investor. You get to observe your smoothly-running ATM machine and its predictable cash flow instead of having to dive into the inner workings of the machine.
Whichever analogy speaks to your situation – whether you’re a Red Dot without an exit map or a Red Dot at the center of a circle – growing your business, franchising or selling your company without making major changes won’t be fruitful. Need more motivation? The further away from the center of your circle you stand, the more valuable your self-managing business will become. The better your exit strategy is mapped out – even if it’s slated for 10 years from now – the better its valuation will be and the more options you will have to sell it at a premium. . Move your red dot to gain greater freedom, flexibility, fulfillment and financial success.