The European Mind

Some of the best social media content this week has been Europeans experiencing America for the first time.

One, a German tourist named Freddy, went viral with many of his posts receiving millions of views.

He, like the others, are here for the World Cup. Freddy has been driving through the South, posting everything he sees. A Buc-ee’s gas station the size of a small airport. A Waffle House breakfast at midnight. A Bass Pro Shop with an indoor shooting range. People and landscapes that can change wildly from state to state.

To him, every one of these is astonishing. He keeps using the same phrase. “The European mind can’t comprehend this.”

What's funny is that none of it is astonishing to the people who live there. The locals see the same stores, landscapes, and people and likely feel little to nothing. They've stopped seeing these things.

That's what’s interesting about seeing something with fresh eyes. The tourist and the local are looking at the identical thing. One sees a marvel. The other sees the background noise of a typical day.

What matters then isn’t the thing, but who’s looking at it and how long they’ve been doing so.

The ”fresh eyes” concept applies not only to places we visit but our businesses. What would an outsider with a fresh perspective see when they looked inside yours?

The Outsider

As a Fractional CFO I am an outsider, seeing a company with fresh eyes in the way a tourist sees a new place for the first time. In addition to the fresh perspective, I also have reference points from working with numerous companies across a variety of industries.

The owners and employees are locals. The business processes, company culture, prospects, and everything that makes up the business has likely become ordinary.

Whether it’s the pricing page they wrote three years ago or the one client who has grown to forty percent of revenue. These stop registering as novel as a new crisis or initiative commands attention each day.

The blindness runs both ways. You miss problems you've adapted around, and you discount strengths you've stopped valuing. The cost here is that you pour resources into problems that don’t need fixing or improvement while other, more critical areas are neglected.

An outsider, whether they be a consultant, a buyer, an investor, or a lender sees both, with none of your history and none of your sentiment.

The question is never whether someone will see your business with fresh eyes. Someone will. The only question is whether you see it first, while you still have time to do something about it.

Blind Spots

Every business thinks they’re unique but the blind spots are common across industries and company stages. The following are the most common and impactful ones.

In Love With The Product, Blind To The Market

The company’s marketing website is amazing. The product demos well with a clean, well designed user-interface. The product delivers exactly what is stated and the development roadmap is set to build numerous new features that sound amazing.

Problem is, no actual buyers seem to care, i.e., no product-market fit. Sales cycles are long and rarely convert. What’s worse, is that everyone but actual buyers tells you how great your product is. I’ve been there and it is the most dangerous of places a business can find itself. False validation can delay making the necessary changes to correct course.

Numbers don’t lie. The false validation can be blinding but cash flow and runway are ruthlessly clarifying. The company often simply needs someone to remind them of those realities.

External Growth, Internal Chaos

Growth solves many problems and creates a few as well.

No doubt, being able to point to strong growth will fetch a nice multiple if you ever decide to sell your business. Just remember, the listing amount might be derived from such a number but the actual offer amount will get discounted with all of the things a buyer needs to fix.

If financials are a mess, internal processes are manual and nothing is documented, outsiders will begin to question and discount heavily the value of the business.

This scenario is completely normal in a high growing business. When building companies, founders often have to decide what they’re going to let fail.

Growth is one of the most common blinders and clarifiers. It is often the internal chaos created by growth that catches up and hinders future growth.

When The Business Is Really A Job

One of the more common reasons I hear when a founder is ready to hire me is that they “can no longer do it themselves”.

When I begin working with them, I realize not only were they ‘doing the financials’ but were overly hands-on in multiple parts of the business.

For sure, everyone involved in a startup or small business has to wear many hats. But an owner’s job is to find a way to fire themselves from jobs whenever possible.

Your business may be growing and doing well but if a buyer were to look in and see that it takes the owner sixty hours per week to make it run, they will discount the price heavily.

In their mind, they will need to go hire one and a half full-time employees or more to replace your efforts. That is a real hit to their expected profits.

The Next Step

You can't see your own business with fresh eyes. Nobody can. You're too close to the thing you've spent years building.

But the blind spots are real whether you see them or not.

• The product the market hasn't actually validated.

• The internal chaos hiding under good growth.

• The business that's actually a job.

Each one is invisible from the inside and obvious to an outsider looking in for the first time.

Someone will see your business clearly. A buyer, an investor, a lender. The only choice is whether you get that view now, while there's still time to act on it, or at the closing table, when all you can do is take the discount.

That outside perspective is what I spent years providing as a fractional CFO, walking into companies and showing owners what they'd stopped seeing.

I built Valotare to look at your business the way an outsider would. It's an online valuation and due diligence platform that gives you an objective read on what your business is worth and shows you what a buyer's diligence will surface, while you still have time to act on it.

It's in free beta right now. If you'd rather know your real number today than be surprised by it at the worst possible moment, sign up below.

Valotare Beta

If you or someone you know is any one of the following:

• Business owner who is considering selling (even if they’re curious or may not be selling for several years)

• Business buyers

• Business brokers

I would love to have them try Valotare for free in exchange for feedback and a review if satisfied.

Forward them this issue of the Leap or send them to the following link:

Valotare Beta

My goal with The Leap is to provide you each Saturday with the knowledge, tools and lessons learned to help you get started and keep going toward building your future. 

Whether you are making the leap to startups, solo-entrepreneurship, freelancing, side hustles or other creative ventures, the tools and strategies to succeed in each are similar.