Is It Time For Your Annual Physical?

Mark Jordan

Most people agree that regardless of your age, an annual physical is a good idea. In fact, you would be hard pressed to find anyone who would categorize it as a waste of time. Unfortunately though, all too often it ends up on the "I’ll get around to it list," as many of us elect to put if off until another day. An annual business physical or check up typically meets with the same results – put it off to a later date. Why? Two reasons – perspective and "the treadmill effect."

First, let’s tackle perspective. I’m convinced most of us simply lack a healthy perspective of time. In other words we don’t really grasp the truth that we only have a limited amount of time to work with. We are so conditioned to operate on a twenty-four hour period that we forget our real allotment of time is around eighty years. That being said, wouldn’t it make more sense to take action on items that impact the years versus the days? That’s exactly what a physical does – it maximizes your opportunity to extend your years. To the extent you discover health problems early you have a greater probability of diminishing their impact on your health. Your business is no different!

The second reason we tend to put off a business physical is because of what I call "the treadmill (TM) effect." The TM effect is real simple – if we are on the treadmill, then we think we need to keep moving until our time is up. The problem is our treadmill never stops until it stops permanently. As a result we need to force ourselves to get off the treadmill periodically and ask ourselves two questions: are we on the right treadmill, and are we going at the right speed.

I know it sounds simple, but when was the last time you had a "business doctor" examine your business and point out your health problems? When was the last time you got off the treadmill we call the daily grind to address your company’s health?

Once you take the plunge, the first step is engaging a professional to examine your business and present you with a diagnosis and plan of action. Choose your professional based on your ultimate exit strategy. If you plan on passing your business to your heirs then hire a professional who specializes in that area. If you plan on selling your company at some point, then hire a mergers and acquisitions firm to facilitate / quarterback the process.

A mergers and acquisitions professional will give you a unique view into the strengths and weaknesses of your company through the eyes of the buyer. Warning – don’t attempt the diagnosis yourself. You are too close to the patient.

Of course, review of the core business functions such as marketing, production, finance, human resources, technology, etc. should drive the process. As you go through the examination, remind yourself, there is no perfect company. Every business has obstacles and challenges they face. They arise from many different areas including specific industry factors, product issues, leadership qualities, personnel problems, and capital shortages.
Ultimately your goal is to gain an understanding of the dynamics among these core activities of your company. They must all be in balance in order to work properly. When these activities get out of balance, your organization experiences inefficiency and undue risks. Understanding leads to change. Once you clearly see your company’s strengths and weaknesses, change is not far behind.
Once the review is complete, you have a list of obstacles and framework in place for annual reviews and monitoring. Set goals for improvement in each functional area of the business and allow your advisors to provide regular feedback.

If the average age of the person reading this article is forty and you plan on retiring at sixty-five, then you have about twenty-five years left to work with. Shouldn’t you be working on tasks that give you the greatest return during that time? The only way I know to determine what those tasks are is by having a business physical.

Remember Jack Paar’s famous quote? My life is like one big obstacle course with me being the chief obstacle. Well, you know what to do from here.

Mark Jordan is Managing Partner of Vercor, a national mergers and acquisitions firm. He also holds an MBA, BS in Business Administration, and numerous designations. He can be reached at 770-522-0300 or mark@vercoradvisor.com.

Copyright © 2004, Mark T. Jordan. All rights reserved. Permission granted to reprint this article on your web site or in your newsletter without alteration if you include this copyright statement