By Peter Janis
From the Floor
Where Do You Go from Here ?
Is your business a make-work project ?
Part 2
This is part two in a three-part series about preparing your business to sell . For part one , “ Prepping Your Business to Sell ,” see the February / March 2021 issue of CMT .
If your goal is to merely put in time and enjoy a modest living , then have at it ! If instead you want your business to thrive , then you need a different mindset . There is no right path forward — it comes down to you and your personality .
When I started out , I joined up with a fellow that was building cables in his uncle ’ s garage . We started with equal investments as 50 / 50 partners . As things advanced , it was clear that we needed additional funding . Unfortunately , my partner had already mortgaged what value he had in his home and squeezed what he could from family loans . He simply could not come up with his end of the deal . I would get weekly calls from his bank asking when he could make a mortgage payment . So , I injected additional funds and ended up owning 72 % of the company . Unfortunately , his half was pared down to from 50 % to 28 % and as a very proud person , he resented the partnership from that day forward . As I reflect back , the added funds allowed the company grow and we were able to pay ourselves a modest salary . What he conveniently forgot : the bank did not foreclose on his home .
My vision for Radial was to grow the company and become a global player . I would travel incessantly and work from 5 a . m . to 10 p . m . every day . When back home , I worked most weekends . In my mind , hard work equals success . Yet while on the road , I would often call the office and by 5 p . m ., there was no answer . My partner had gone home for the day while I was still slugging it out . We were clearly cut from a different cloth . I eventually bought him out and with his shares , he started another cable company where he has managed to run a nice little nine-to-five business for over 20 years . Radial grew to become a global brand .
Growing a company begins with a vision , and then it ’ s about working on the vision until it becomes reality . The trick is to understand the difference between working in your business versus working on your business . If all you are doing is trading your time to make ends meet , then you have to ask yourself if you are happy ? My brother does home renovations and hates to work when it ’ s cold outside . He and I are complete opposites , yet he is perfectly happy .
Setting goals does not have to be extreme . The first task when evaluating your business is to assess if it is well run . This begins with yearly goal setting in the form of budgets , and the discipline to stay on top of your finances . From both a banker ’ s and buyer ’ s perspective , a well-run company is easily tabulated by reviewing financial statements and management reports . Run your company as if it is 10 times bigger and you will have a much better chance of getting there !
When I purchased Jensen Transformers , I was safeguarding the supply chain for the most critical component of our market-leading Radial JDI direct box . I knew the company was in the red , and on paper , it was not worth much of anything . I paid a premium because I felt that it was the right thing to do . Once we got in , we were amazed to discovered that this iconic company – the one that essentially invented the audio transformer – had a management team that could not run a business to save its life . Management did not know what it cost to build a transformer , nor did they know how many man hours it took to build one . Because they did not produce a bill-of-materials , they had no idea how much wire went into the production of each unit and would often run out of raw materials . This caused shortages and cancelled orders . They had a great bunch of hard-working people going about their day-to-day with no light at the end of the tunnel .
Now here ’ s the thing : not everyone is made out to be an entrepreneur . On the other hand , some of us have no choice .
The most critical aspect is to understand your strengths and your weaknesses . I don ’ t like paper work , so I started by hiring a part-time bookkeeper and eventually grew the position into a full-time chartered accountant . I hate managing staff , so I hired a general manager . My role was to get out and sell , so this is what I did . I did what I had to do to win .
At one stage in the game , I hired a business consultant who had previously been working for a $ 100-million firm . He would often ask me the same question : “ Peter , who is driving the bus ?” This got me thinking that , if I am driving the bus , then when I sell , will I be forced to stay on ? The message was clear — I had to lay the groundwork so that the company could function without my being there .
It all starts with a clear vision of where you want to be , laying out a path forward with ambitious-yet-achievable milestones . Work the plan . Don ’ t let up . If there is a barrier ahead , find an alternative path around it .
This column is the property of Peter Janis and authorised to be published and republished by NWC .
Formerly the president and CEO of Radial Engineering Ltd ., Peter Janis has been in the Canadian music industry for over 40 years , working in retail , distribution , and manufacturing . Peter now offers consulting services with his firm Exit-Plan , where he assists business owners in increasing their sales and enhancing the attractiveness of their business in preparation for retirement . For more information , visit www . exit-plan . ca .
CANADIAN MUSIC TRADE 9