If you’re not Australian, ‘getting your lunch cut’ means encountering the unexpected that derails your plans.
You know the classic 2×2, right?
Consultants can flog you anything with it, and it’s a great tool – everyone’s happy when you’re up in the top right – except when it’s a trap.
And the family enterprises I’ve met have a feeling something’s up:
Whether it’s preparing the business to sell or the kids to take over, I’m working with the smart ones to leverage the 3rd dimension missing from this 2×2.
All Hail the Mighty Grid
If you’ve been reading for a while, you’ll remember the software companies coming for the real estate industry and the guy rolling up and offshoring conveyancing businesses.
Or perhaps the commercial printer gathering client lists from retiring print shops and redirecting their phone number to his, or the hands-on builders who know modular is smarter, though can’t crack scale unless they can afford robots.
Every one of these involved businesses that were disrupted, bought out or simply closed down, yet you could easily plot each on a 2×2 before it happened and make them look stellar.
I’ll give you a few examples:
- Commission rate x listing volume (real estate)
- Margin x volume (conduit and cable manufacturing)
- Yield x land value (family farms)
Most leadership teams in a business will point to the top-right quadrant, feel reasonably smug about having figured out the winning formula, and then set off a chain of actions that filter down to make the entire company shift direction.
And they’ll pay through the nose for a big firm to help them do it, or about half that for an independent like me to be in the room.
Expecting the Unexpected
So what’s missing? If you’re considering future resilience, or the potential value of your business to an external acquirer in that future, quite a lot.
Let’s look at the list again, imagining we’re in the ‘top right’ sweet spot for each;
Commission rate x listing volume (real estate) BUT portals own the buyer relationships; flat-fee and AI-assisted listings are trashing the high commission quadrant.
Margin x volume (conduit and cable manufacturing) BUT the cash cow depends on building codes, recycled-content rules, cheap imports and tariffs.
Yield x land value (family farms) BUT water entitlement pricing, climate impacts, carbon markets and foreign capital appetite.
Change is slow, until it’s not; then it hurts
For the analysts and investment committees that will green-light the purchase of any reasonably sized business, your exposure to structural economic and environmental change is fundamental to their interest in you.
Some will be looking at an indefinite hold, others 7-10 years out, though the golden ticket is engineering an acquisition by a ‘True Economic Buyer’.
This is someone who can leverage your proposition with their existing customer base, and create significantly more value than your purchase price.
Either way, aiming for the top right on a 2×2 doesn’t cut it anymore.
The good news is that if you’re not yet a billion-dollar company, you’ve probably got enough rope to get yourself out of the impending macro-factor-noose; the question is whether you’re up for the challenge.
Others are waiting for your place.
If you’re a successful and ambitious person, responsible for a private business or family enterprise, and you want help making your next big thing happen, take a look at how I can help on www.philipbateman.com
