The Goose and the Golden Egg

Almost anyone can deliver results for a quarter or two but the real challenge is to create a business that can sustain both the Goose and the Golden Egg, year after year.

Delivering superior performance while building the production capability to deliver it, again and again, is the very definition of greatness in any enterprise.

Why is this so?

Aesops Fable: The Goose and the Golden Egg

There once was a country farmer who discovered in the nest of his pet goose a glittering golden egg. At first, he thought it was some kind of trick to deceive him. But he decided to have the egg appraised and to his surprise discovered the egg was pure gold.

He becomes more excited the next day when the goose lays another golden egg. Day after day, he continues to find another golden egg. He becomes fabulously wealthy.

But with wealth comes greed and impatience. Unable to wait day after day for the golden eggs, the farmer kills his goose in order to get all the golden eggs at one time.

But when he opens the goose, he finds it empty. There are no golden eggs – and now he has no way to get more.

The farmer destroyed the very thing that produced them.

Within this fable is a key principle to sustainable success.

Sustaining success is a function of two things: What is produced [the golden egg] and the capacity to produce [the goose].

If you only focus on producing the golden eggs and neglect the goose [building production capacity for tomorrow] you will soon be without the golden egg.

The key lies in balancing of Achieving Results and Building Capability.

Operating from your 80/20 Sweet Spot is one way to achieve this balance.

We approach the goal of superior performance by helping you focus on and deliver specific results and build more sustainable production capability.

Under these two areas [Achieving Superior Results and Building Sustainable Capability] we work with you in three areas:

Achieving Results 

  1. Execution of Getting the Right things Done. Achieve specific results like increasing sales, improving quality, scalability, clarity of marketing messaging, or other specific initiatives that are in alignment with your overall goals, guiding principles and mission.

Building Sustainable Production Capabilities

  1. Developing Principle-Centered Leaders. We help build sustainable leadership capabilities based on principles, character, alignment and the ability to achieve consistent   We build principle-centered leaders.
  2. Individual effectiveness. We help small business enterprises to increase the personal performance of their staff.  We build personal greatness.

 

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Seventy to eighty percent of all small businesses are unsaleable on either the terms or timetable the owner wants because they’re not operating from their 80/20 Sweet Spot

80/20 Sweet Spot Rule of Thumb:

If the owner IS the business, it’s worth nothing.
If the owner runs the business, it may be worth something.
If the owner cashes a check from his yacht, and the business is totally independent of him, then it is worth money.

Think back to when you first started your business.  You were driven to create something out of passion or a particular talent. The vision probably included not only providing a good life for you and your family but probably also leaving some sort of legacy for your family, employees or community.

It is unlikely you even thought about your Exit Strategy; about focusing on growing the value of your business as well as making it saleable.

But you should have.

Maybe now you are one of the 6 million-plus baby-boomers who own a business and the thought of saleability is just beginning to loom.

Here are some sobering thoughts: [source: Exit Planning Institute]

One: 70-80% of all small businesses are not saleable for the terms and/or timeline the owner wants because it won’t pass the due diligence test. One of those tests is whether the business is dependent upon a single person or small group of people – lack of systematization.

No sophisticated buyer is going to even want to purchase a business like that.

Two: 80 to 90% of an owners financial wealth is locked up in their businesses.

Three: 63% of the business owners indicated they needed the income from the business to support their lifestyle.

Four: 56% of the business owners indicated they needed to harvest the value of their business to support their lifestyle post-transition

How devastating can these scenarios be to an owner who is planning on the sale of his business to fund his retirement?

How valuable would your business be if you had the following:

  • Great customers who spend 4x’s, 16x’s and even 64x’s the average. Who are a joy to work with. Who refer others just like them. Who pay on time with no hassle. Who fit perfectly into your culture, values and Guiding Principles.
  • Employees who are motivated and engaged.
  • An offering or offerings that are unique enough to differentiate you from your competition.
  • Teachable Processes & Systems – so that the success of your business is not dependent on any single person or team, most specifically, you the owner.
  • Profitability and cash flow far above industry norms.

All of these things happen when you are operating from your 80/20 Sweet Spot and can all happen within a very short period of time.

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