Running a business is a lot like captaining a sailing boat. The open sea represents the market, filled with opportunities but fraught with challenges and uncertainties.
In this analogy, there are two types of skippers, each representing a different approach to business ownership.
Let’s explore these two profiles and see which one resonates with you.
The Struggling Skipper (and those who may not admit it)
The first skipper represents most business owners – about 95% based on market statistics.
These individuals think they are sailing OK (when, in reality, they have yet to confront a storm) or constantly battling against the elements without a clear strategy or plan.
The real test is yet to come!
The Role of the Skipper
In this scenario, the skipper wears many hats. They are not just the captain but also the navigator, the cook, and the sail trimmer. They work in the boat rather than on it.
This means they are deeply involved in day-to-day operations with little time to plan ahead. This hands-on approach may seem admirable at first glance, but it leads to burnout and inefficiency. The lack of delegation means critical tasks are often overlooked, and there’s no time for strategic thinking or long-term planning, let alone much-needed rest time.
Navigation: Directionless Drifting
Without a firm hand on the tiller, this skipper lets the wind take them wherever it pleases.
This represents a business without a clear direction, vision or purpose.
Instead of proactively steering the business towards specific goals, the owner reacts to external forces, often changing course abruptly without a strategic reason. This reactive approach means the business is always playing catch-up, trying to survive rather than thrive.
Crew Training: An Afterthought
Crew training is haphazard in this boat’s chaotic environment. Roles are not well-documented, and training is not standardised, resulting in a disorganised and inefficient crew.
The crew (employees) are unclear about their responsibilities and lack the skills and knowledge to perform their roles effectively.
When one of the crew members (who knows what they’re doing) leaves the boat, their knowledge and IP depart with them, leaving the ship floundering.
This lack of structure can lead to mistakes and miscommunications, compounding the skipper’s challenges.
Ship Maintenance: Crisis Management
Maintenance on this boat is only addressed when something breaks. There is no proactive plan for upkeep, leading to frequent breakdowns and emergencies.
This is akin to a business owner who only deals with problems as they arise rather than anticipating and preventing them. This approach disrupts operations, incurs higher costs, and leads to lost productivity.
Overall Success in Races: Consistently Average or Poor
Unsurprisingly, this skipper’s performance in races is poor. They will unlikely succeed without a clear plan, a well-trained crew, or a maintained ship.
The same goes for their business, which struggles to compete and often falls short of its potential.
Probable Outcome: Shipwrecked
The inevitable outcome for this skipper is a shipwreck.
Without a plan, direction, or preparation, the boat is doomed to fail.
Similarly, businesses that operate in this manner are at high risk of failure, struggling to create value for their business that one day needs to be transformed into the owner’s wealth goals.
Statistics show that 95% of SME business owners either can’t sell their business or regret doing so afterwards. Not a good outcome for all those years of hard work!
The Master Skipper (Owner)
In contrast, the second skipper embraces the principles of master planning, leading to a vastly different outcome.
The Role of the Skipper
This skipper acts as a true captain, delegating tasks to a well-trained crew who operate the boat seamlessly. The skipper can even take breaks to rest because they have planned ahead and trust their team.
This represents a business owner who works on the business rather than in it, focusing on strategic planning and growth rather than getting bogged down in daily operations.
Navigation: Strategic Steering
With a firm hand on the tiller, this skipper knows precisely where they are going and how to get there. They have a clear vision and a strategic plan to achieve their goals. They use the weather to their advantage, representing a business owner who leverages market conditions and opportunities to steer the business towards success.
Crew Training: Systematised Excellence
Crew training is a priority and is handled efficiently because all roles are clearly defined, and a robust training system is in place. This results in a highly skilled and capable team. Employees understand their responsibilities and have the skills and knowledge to excel. This structured approach leads to higher productivity, better performance, and fewer mistakes.
Ship Maintenance: Proactive Planning
Maintenance is scheduled at specific times to minimise disruption and prevent breakages during races. This proactive approach ensures the boat is always in top condition. Similarly, a business owner who plans for maintenance and addresses potential issues before they become problems will see smoother operations and lower costs in the long run.
Overall Success in Races: Consistently Wins
This skipper is a regular winner, consistently finishing races and often coming out on top. They are set up for success with a clear plan, a trained crew, and a well-maintained boat. Likewise, businesses that adopt this approach are more likely to achieve their goals, outperform their competitors, and enjoy sustained success.
Probable Outcome: America’s Cup Winner
The ultimate outcome for this skipper is winning the America’s Cup. They are not just surviving but thriving, setting records and achieving great success.
Businesses that embrace master planning and strategic thinking can achieve similar levels of success, becoming leaders in their industry and enjoying long-term prosperity.
Statistics show ONLY 5% of SME business owners create an enterprise that gives them control over when they want to transition (with a business that is attractive to investors and will fetch the highest valuation) into the next chapter of life that is both clear and exciting for them.
That’s the type of outcome all business owners deserve for their years of hard work, but it only comes to this small 5% minority for a reason.
Which Skipper Are You?
Now, it’s time for some self-reflection. Ask yourself:
- Which skipper are you now?
- Which skipper do you want to be?
Are you the skipper struggling with constant firefighting and reacting to challenges?
Or the one that thinks they’re doing OK but, in reality, does not have a clear plan (that’s needed to align and achieve their business, financial, and personal goals) that will navigate them to a successful life ahead?
A majority of owners think they are not in either of these classifications, but in reality, 95% of owners are.
Remember, the best way forward is to be honest and humble in your self-reflection. By seeking the right assistance, you can set your sailing boat on a course towards success and growth!
If you are among the 5% minority of owners (the “master skippers”) who strategically and successfully steer their business in total alignment with their financial and personal goals with a well-trained team and proactive approach … well done!
If not, don’t leave it too late to change course and set sail towards a brighter future.
The information contained in this article is general in nature and is not legal, tax or financial advice. Contact a lawyer or a tax or financial professional for information regarding your particular situation. The information in this newsletter is provided with the understanding that it does not render legal, accounting, tax or financial advice. Clients should consult their legal, accounting, tax or financial professional in specific cases. This article is not intended to give advice or represent our firm as qualified to advise on all areas of professional services. Master Planning is a discipline that typically requires the collaboration of multiple professional advisors. To the extent that our firm does not have the expertise required on a particular matter, we will always work closely with you to help you gain access to the resources and professional advice you need.
Any examples provided are for illustrative purposes only. Examples may include fictitious names and may not represent any particular person or entity.
