0/ If you’re an SMB operator and want to increase the value of your business, focus on 2 things above all else.
1. EBITDA: how much $ do you make
2. Risk: how reliable is the $ you make
Enough has been written about #1. Here are 5 things you can do to tackle #2:
[THREAD]
1. EBITDA: how much $ do you make
2. Risk: how reliable is the $ you make
Enough has been written about #1. Here are 5 things you can do to tackle #2:
[THREAD]
1/ All 5 of these tactics are a function of the same guiding principle:
Spend more time working ON the business, not IN the business.
Your job as CEO is to consistently:
- Identify opportunity
- Execute once
- Set process
- Delegate
- Fire yourself
With that said…
Spend more time working ON the business, not IN the business.
Your job as CEO is to consistently:
- Identify opportunity
- Execute once
- Set process
- Delegate
- Fire yourself
With that said…
2/ Establish your focus
Most SMBs survive in the early days through 1-2 key customers.
If you do a good job, they'll give you more business.
That's the trap.
If it's not in your core focus, resist the urge.
If you don't you'll become a consulting firm for 1 customer.
Most SMBs survive in the early days through 1-2 key customers.
If you do a good job, they'll give you more business.
That's the trap.
If it's not in your core focus, resist the urge.
If you don't you'll become a consulting firm for 1 customer.
3/ Eliminate Key Man Risk
SMBs are overly reliant on a small handful of individuals to run the operation.
Implication: Most knowledge about the business sits in the heads of a few people.
Take the time to develop strong Tier 2 management - this creates redundancy in the org
SMBs are overly reliant on a small handful of individuals to run the operation.
Implication: Most knowledge about the business sits in the heads of a few people.
Take the time to develop strong Tier 2 management - this creates redundancy in the org
4/ Institute Operating Process
Strong Tier 2 management isn't good enough. You need knowledge to live in docs and systems, not just in brains.
Every dept should have a stand alone playbook.
An easy test: "how quickly can somebody that knows nothing about the dept. plug in?"
Strong Tier 2 management isn't good enough. You need knowledge to live in docs and systems, not just in brains.
Every dept should have a stand alone playbook.
An easy test: "how quickly can somebody that knows nothing about the dept. plug in?"
5/ Double Down on Corporate Controls
Accounting is the lifeblood of your business.
A lot of SMBs run their financials off of Excel and don't understand their cash flow.
This will literally break your business - I've seen it so many times.
Set up proper systems on Day 1.
Accounting is the lifeblood of your business.
A lot of SMBs run their financials off of Excel and don't understand their cash flow.
This will literally break your business - I've seen it so many times.
Set up proper systems on Day 1.
6/ Develop a killer brand
SMBs are (on average) SO bad at marketing. The fallacy is most think it takes a lot of resources.
It really doesn’t!
- Invest in a good looking site
- Take professional headshots
- Create high fidelity content
The ROI of professional optics is 🔥
SMBs are (on average) SO bad at marketing. The fallacy is most think it takes a lot of resources.
It really doesn’t!
- Invest in a good looking site
- Take professional headshots
- Create high fidelity content
The ROI of professional optics is 🔥
7/ The cool part about hitting on all of these is they will tie right back to overall company growth.
Over the last 2 years, we’ve instilled all 5 of these into our company’s fabric. It’s led to:
- 7 figure EBITDA growth
- Materially less risk in the operation
Over the last 2 years, we’ve instilled all 5 of these into our company’s fabric. It’s led to:
- 7 figure EBITDA growth
- Materially less risk in the operation
8/ So remember - keep it simple.
If you’re running an SMB, do everything you can to:
1. Establish your core focus
2. Eliminate any key man risk
3. Institute operating process
4. Double down on corporate controls
5. Develop a killer brand
If you’re running an SMB, do everything you can to:
1. Establish your core focus
2. Eliminate any key man risk
3. Institute operating process
4. Double down on corporate controls
5. Develop a killer brand
• • •
Missing some Tweet in this thread? You can try to
force a refresh
