In a world where speed appears to be everything, often the compromise that is made is to take the generic or easy option. This has become so common in business, that the generic option is often the only one put forward – whereas there is generally many ways to skin a cat.
Now whilst I have no issue with a simple, cheap option when you can get it – the critical point is ensuring that it’s the right option.
When you are next looking for a solution to a problem or need – pause for a moment to consider the following;
No such thing as generic.
Every business is unique and will have different balance sheet strengths, different skills or products, be in a different part of their life/growth cycle or may have existing restrictive arrangements in place. So if you find that someone is suggesting a solution quickly when they don’t have all of the pertinent information – then step back.
Buying a shoe is a simple analogy here – you would not buy a shoe unless if fitted your foot correctly, either by trying it on or by measuring your foot – or perhaps both.
Finance for instance, is an example where you don’t have the choice to try it on. In these types of situations the measuring process is all the more critical – you need to fully understand the offering and why it’s suitable for your business. If this is not done, then I can virtually guarantee that your arrangement will be a poor fit.
It’s not just about today.
Keeping to the shoe theme – your business, much like your foot – grows and changes over time. If your business is young and growing fast, then it’s needs are also changing – and often very quickly.
So when you look for a solution, don’t just think about today’s need but consider also where you expect to be tomorrow and the day after. Try to factor in your expected needs or as a minimum, build in a review period or low cost break clause if appropriate. Failure to plan in these areas may result in unexpected (and unwanted!) costs or restrictions.
Simplicity has a cost.
The simple option often has the allure of being quick or cheap, or at least – so it seems in the beginning. Frequently new companies are set up quickly with little consideration given to what it will do, how it will operate, who will be shareholders, who is the director/secretary, does it need a trust, or who has the liability etc.
Now play this forward a few years; the business is operating well and it has a few assets (including property) along with some debt , a number of lucrative contracts and a few licenses……but then something happens. It could be a break-up of the owners, tax issues or it may be that it is getting sued, but regardless – the simple cheap structure which was established on day one does not provide the business with either the protection or choices it needs.
When you commence a new business relationship – resist the urge to just take the simple option. Do the research and appropriate due diligence based on all of the facts available – to enable an informed decision. If it happens to be the simple option that you take, then it is because you have made an informed decision that it is the right one – rather than it simply being the easy one.
Be clear on what you need.
This may seem like the classic “obvious statement” but many businesses lose sight of what actually matters.
For example, if you are buying a property and you need funding at $500K to settle, then anything less is not going to cut it. Considering wonderful terms on a $400K loan is a waste of time, as is devoting a lot of time to nailing down a few extra points off the interest rate or trying to go short on the security.
There is no problem with negotiating hard to get a good deal – but don’t push the envelope so hard that you risk missing out on what you actually need. Getting the property funded for settlement is the clear objective in this example, so remain focused on this and don’t be distracted.
Take along an open mind.
Be open to the different and unusual. Traditional ways of doing things often fall into the simple and generic categories, so perhaps consider some new alternatives. These could include simple variations on the simple methods, or they could be totally “off the planet” different.
My point here is simple – if you go into a transaction fixated on the product/solution that you want, then the chances are you will find it – all the while being blind to other options. Every now and again, it’s good to just have a look around for some fresh options.
By following these simple points you will achieve a superior outcome.
Being clear on what you need to achieve – as opposed to simply being focused how you will achieve it, opens up a world of possibility. Going to the market with; an open mind, a clear objective, reference to where your business is today (with an eye on tomorrow) and armed with the agility to side step the “simplicity” pit – will….quite simply, surprise you at how many different ways there are to skin a cat!