BIZTIPS - October 31, 2004
Biz Tips: Know Your End-Game
Sunday, October 31, 2004
By Art Hill
Like the world champion Red Sox, you need a clear objective for your business when you start the season. You might not be setting out to win your first World Series in 86 years, but knowing your business objective can be just as important.
Remember to “begin with the end in mind.” Whether your business is just forming or has sustained your family for generations, you need to think about your last day in business as well as your first. Take Morris Air for example. In 1984, David Neeleman and June Morris, then travel agency execs, started a modest charter airline in Salt Lake City. Some airlines had brightly painted planes and slogans like “Your Top Banana to Reno.” Others adopted a slightly older sales technique and cut flight attendant uniforms to fit the miniskirt craze. Neeleman and Morris were a bit more creative. They offered discount fares to undermine traditional (expensive) airlines in a city with explosive growth and an ideal location for popular west coast destinations.
But the key to their long range success was their end-game plan. Using only Boeing 737 aircraft and adopting the highly successful “no frills” approach of Southwest Airlines, they built a company designed to be sold. In 1994 Southwest purchased its little look-alike for the tidy sum of $129 million. Morris Air had begun with the end in mind and ended on a note of stunning success.
Not all businesses achieve the goals of their owners. But every successful business owner needs to know what those goals are, even if they change over time.
What are your end-game options? You could build a family business to be handed down from generation to generation, or a high-growth business, leveraged by investor dollars and built quickly to “go public.” Like Morris Air, you can design and manage your business to be sold, licensed, or franchised. There are lots of variations, and there’s a lot of help available through your Small Business Development Centers and others. The Austin Family Business Program even offers specific guidance for business succession planning.
Outside investors require a plan for the final disposition of a business. You should too. Your employees deserve it. Your success may depend on it. Begin with the end in mind.
Content © 2004 East Oregonian