Understanding the Totality of Your Business – Transcript Notes
Welcome to the Exit Mindset Podcast. I’m Rem Oculee. 15 years ago, when I was trying to sell one of my companies, I couldn’t get what I thought was the right price for it. I realized I had things set up the wrong way, even though the company was profitable. So, I spent years researching and studying exit strategies to improve my company’s valuation. I discovered that the same process that improves valuation would improve business profitability and give me more free time. I’m here to show you what I have learned. You see, the best way to grow your business is to look at it from the perspective of someone who’s going to buy your company. Once you start thinking that way, magic happens, and you start seeing things you could not see before. But that’s not all, I also discovered the three principles that you must know to command a better price for your company. The three principles are first, the product, second, the infrastructure, and third, the conversation you have with the consumer. Once you master these three principles, you will be on your way to increasing your profits, your company valuation, and get more work-life balance. So, listen in and learn how you can do that. I will teach you through this podcast, lessons from the trenches, and we will have a dialogue with some of the greatest minds on the planet.
Rem Oculee (01:29):
Do you ever wonder if there’s a specific tool that could help you understand the totality of your business environment with one shot? Probably sounds too good to be true, but I think I have the answer for you today and it’s not a brand-new tool. Many big corporations use that tool to analyze their companies. It’s called SWOT. Stands for strengths, weaknesses, opportunities, and threats. So, if you take that methodology and apply it, you’ll find a lot of power built into it. On the surface of it, it seems very simple; strengths, weaknesses, opportunities, and threats. But once you start digging into it, one by one, that’s where the power lies. So, let’s get started here. The first two things you got to remember when you use that tool is that you have to operate initially at a high level with it. Don’t try and dig into the minor details.
Rem Oculee (02:21):
What I want you to do is draw a square and turn it into four quadrants. And in the upper left hand, it’s ‘S’ for strengths, just at the upper corner. On the upper right hand, put ‘W’ for weaknesses. On the lower left, put “O “for opportunities. And on the lower right, with ‘T’ for threats. So, let’s first start by why you SWOT. Number one, it’s a 360-degree analysis of your company. So, let’s talk about some more reasons why you should be using SWOT. Number one is the 360-degrees analysis of your company. It encompasses all aspects that are important to your progress and survival. Number two is proven to be effective. And number three, it is not your granular, it can be built in a short amount of time and give you insights into how your company’s moving. So, let’s talk about why is it important to the Exit Mindset. We need to keep in mind that your primary goal is to think of your company as a number, as a value.
Rem Oculee (03:21):
What is the valuation of your company right now? And number two, then you want to think of your company as to what value will it have as you sell in the future. And what can you do today to increase that valuation. If you take the concept of reverse engineering, which we talked about in the past, where you look at your future objective and go backwards. And then use the SWOT Analysis to try to understand where you are right now, and then start deciding on the path you need to go on. So, the first thing you’re going to start with, your strengths. So, let’s talk about what strengths are we talking about. The three things we talk about in the Exit Mindset are the product, the infrastructure, and the conversation. Where are your strengths there? So, list them and then list your one or two strengths with relative to each one of them.
Rem Oculee (04:04):
But the key to this is that you got to do in a very objective way. Don’t try to go into the most granular level of your strengths. Just your big strengths, where they are. Once you identify them with respect to each one of them, you’re gonna put it there. Now, some, sometimes you’re going to find that I can’t find the strengths in that because I don’t know what the strengths are. Do your best, trying to come up with at least two for each, make it simple. Then you go to your weaknesses. This is where sometimes hard to be objective and also hard to find the real core issues. And the easiest way to do this is to use what I call group think. So, bring the people in your company that know what’s going on. Again, some things you might know, some things they might, they might know themselves.
Rem Oculee (04:52):
So, what you want to do is get as many ranges of opinions as you can. And again, make sure you keep it to the highest level. So, what are the biggest two weaknesses in your product? What are the two weaknesses in your infrastructure? What are the weaknesses in your conversation with the consumer? And we’re not talking about just the verbal, it’s verbal, nonverbal or any form of communication you’re having with them, any form of conversation. Then you go to the third quadrant, which is your opportunities. What opportunities exist there in the marketplace for you? Where do you think future breakthroughs are going to come from? Don’t try and think of solutions. Just trying to identify them to identify what the, what the opportunities are. And again, list them for all three. And you do the same for the last one, which are the threats. Where are your competitors?
Rem Oculee (05:37):
Where do you think the biggest problems are? What could happen in your environment that could be a threat to you and your situation? In every company I built, by the way, I did exactly that process. So, usually I do that evaluation on a monthly basis myself. But then eventually I’ve decided that I should bring the team into the process and started doing that with them. And I cannot tell you how much power I found by bringing the team in with me. Because when I was doing it, I was identifying all of these things. But I wasn’t having the range of opinions and the direct understanding of what people are thinking when it comes to these particular four quadrants. They had insights that I couldn’t think about, and they were letting me know things that I wasn’t aware of, and that helped a lot. So again, I’m trying to give you information and ideas from the trenches, is that it would work much better if you’re bringing your people into the process.
Rem Oculee (06:27):
Now, the other thing about SWOT Analysis, it gives you an insight into not just your external issues or references outside the company, but internal as well. So, once you’re done with that analysis, you can start examining where the issues are, where the solutions are. You’re going to find a lot of power in that again. So, once you’re done, you’ll probably have a meeting with your team, and you’ll start looking at it one by one. And then for each one of those, if it’s a strength see how you can improve it. Or is this the thing you should be strong on? I can’t tell you how many times we looked at the strengths and realized that is not what we should be strong on, we should be strong in something else. So, that’s going to be helpful to you. It comes to the weaknesses. It allows you to understand breaking points.
Rem Oculee (07:12):
You evaluate them based on their ability to wreak havoc in your company. That’s the first thing you have to go look at, is this weakness going to be destructive, or is it going to be something that I could live with until I fix it? And in many, many cases, you’re going to find some things will pop up that are very important for you to fix immediately. Threats and opportunities, it’s the same thing. You’ve repeated the process, and you’re trying to understand what are the things you can take advantage of, and what are the things you should be avoiding. Let’s talk about some of the pitfalls that I find when people do SWOT Analysis. One of the biggest ones that I find is that people make long lists of strengths, weaknesses, and they’re excited about in the beginning, “Oh let let me list all these things.” I suggest in the beginning, don’t try and do it that way, try not to limit it to the high-level thinking.
Rem Oculee (07:58):
And then as you become more proficient, try and drill down to the things that you’re looking for. Or you could do a different way. You could figure out the high-level points in each quadrant, and then from there trying to go drill down separately. But don’t try to make a SWOT Analysis a place where it becomes overwhelming. And I can tell you if you want one piece of actionable item, you can take right now just do it that way. Just take the high-level approach, try and limit it to two to three per item. Don’t go more than that, and the results will show. It’s something that it should be doing at least monthly, and if you like do it weekly. You see, as the leader of your business, you’re the one who sets the vision. But if you’re not analyzing what’s going on with a company and you’re not analyzing the strengths, the weaknesses, the threats and opportunities, and you’re bringing all that into the vision.
Rem Oculee (08:49):
So, that makes sure that it’s consistent with, with what you’re looking for. That is the way to do this, and to make sure that you are on target with what you’re looking to achieve. You need to remember you and your employees are in it together. You gotta work hand in hand, and make sure that you all collaborate in the right way to make sure that you all understand each other clearly. You will not be able to understand everything that goes on. They’re the experts at what’s in their field. You’re not by the way. Sometimes you think you are, but you’re not. And you gotta be able to trust their judgment, understand what they’re telling you, and effectively incorporate your vision into the problems with they have. That way you can adjust it a little bit, to make sure that you get to the target you’re looking for despite all the difficulties that they’re seeing.
Rem Oculee (09:32):
And by the way, that applies also to the strengths. So, sometimes they’re going to come to you and tell you, “Here’s a strength. Here is something we do very well.” And you need to seize on that and use it as a platform to go forward. So, the big thing about SWOT Analysis is what I did for you here is giving you a tool. What I’m trying to do here all the time is gives you tools. I don’t give you too much of a complicated ideas that would end up just sitting on the shelf. So, SWOT by itself can be a complicated tool if you wanted it to be. I am saying, let’s just simplify it. So, you’re gonna take that tool, you’re gonna take the methodology. You’re going to simplify it into a pen and a piece of paper, and you’re going to draw a square and make four quadrants and just write down all of these four elements in there and all the results you’re looking for from that particular tool, and then go in and work on it and don’t make it too complicated.
Rem Oculee (10:24):
This exercise should not take you more than 20 minutes a month, if you want it to. And you take that piece of paper and look at it, examine it and just go work on it with your people. And you should be much better off. And that will create much more massive results than just kind of randomly working on things and hoping that you understand where you are, where you’re going, or here’s what I think I’m good at. And that’s what I’m not good at, but it’s very random. This actually gives you a framework to operate your company in a very methodical way. So, if you want more information on SWOT Analysis and how, what, it looks like, an example of how you can implement it. Go to exitmindset.com/tools, and you’ll find all the resources over there. And better yet, if you really want to get all the timely information that we have for you, just opt in. Put your email and we will send you future podcasts along with the actual worksheets. So, now every time we have a new podcast, you can get the worksheet right away in your inbox. Rather than having to go to that, you know, look for it on the site. So, there you go. Let me know if you have any questions. Again, remember if you don’t take action, nothing happens. Action is everything. Use it or lose it. I’m Rem Oculee, and I will see you on the next podcast.
Amber Giannone (11:43):
You’ve just listened to the Exit Mindset Podcast with Rem Oculee. If you haven’t yet subscribed or followed, please do so in your podcast listening app. Or better yet, visit exitmindset.com to join the conversation, access the show notes and discover our bonus content. Lastly, we want to help as many business owners as possible. If you know anyone who could benefit from the information given in this podcast, please feel free to share it with them. Until next time…