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What does your business look like in 2037?

Business Value Acceleration

What does your business look like in 2037?

By , October 23, 2017

Over the last 20-30 years, we have seen a wealth eroding trend in investments (and as a result amongst business owners). Our news cycle has shortened dramatically, so has our attention span and in my view so has our investment horizon.

We regularly see CEOs of public companies “hammered” after poor quarterly results (in the same way sports coaches are sacked after six bad games in a row). There is a whole school of entrepreneurship that teaches “fail fast”, and the government has invested substantial $$$ in start-ups and focuses very little attention on “boring” mid-market businesses that have been around for 20 years.

I read an interesting article a few weeks ago, courtesy of Isaac Pino CPA, that goes to the very heart of this issue, about the investment time frames of Warren Buffett, the world’s most successful investor.

It drew a straightforward comparison between the “average” investment holding period for American investors (6 months down from 8.3 years in 1960) and the average holding period for Warren Buffett (20 years – with some investments held for more than 40 years).

how much is your business worth graph
Which also reminds me of a quote I often refer to in presentations: “The proper man understands equity – the small man, profits.” – Confucius, 551 – 479 BC

Imagine the value business owners could create if they had a time horizon for their business of 20 years or longer.

In “The Essays of Warren Buffett: Lessons for Corporate America” Buffett says: Just run your business as if:

1. you own 100% of it,
2. it is the only asset in the world that you and your family have or will ever have; and
3. you can’t sell or merge it for at least a century.”

Buffett’s third point is especially relevant, as it indirectly touches on a critical issue plaguing global economies: public companies, beholden to their shareholders, focus far too much on short-term prospects and quarterly earnings.

In his “simple mission,” the Buffett argues that businesses should abandon that type of short-term thinking and instead focus on the long-term outlook.

If your entire focus was on what the business would look like on 2037 how differently would you think, act and plan? What strategies would you put in place with 2037 as the target?

"What makes sense in business also makes sense in stocks: An investor should ordinarily hold a small piece of an outstanding business with the same tenacity that an owner would exhibit if he owned all of that business."

Warren Buffett, 1993 Click to Tweet
Craig West

Craig West

Executive Chairman | Succession Plus

Craig West is a strategic accountant with over 20 years of experience advising business owners. His background as a CPA in public practice has provided invaluable experience in the key issues of concern to business owners.

In March 2014, Craig was appointed Executive Chairman of the SME Association of Australia, Australia’s largest small business organisation representing over 300,000 business owners.

In October 2014, he was awarded the Exit Planner of the Year at the Exit Planning Institute Annual Conference in Texas, USA, due to his innovative development of an exit planning process to help business owners maximise business value and achieve a successful exit.

Craig’s proprietary structure - a Peak Performance Trust - has won the Australia-wide award for the Employee Share Ownership Plan of the year twice in four years.

In November 2018, Craig launched SME Experts in partnership with Mark Bouris’ Mentored on Podcast One and quickly grew the monthly podcast audience to over 26,500 downloads; in October 2019, he released a new podcast focused on medium-sized businesses - Mid-Market Matters.

In July 2021, Craig joined the NSW Committee for STEP (Society of Trust & Estate Practitioners) – focusing on advising families across generations.

Craig has also launched a SaaS platform, Capitaliz (which captures the 21-step process), to assist other advisers internationally deliver advisory services at scale.

In November 2021, Craig was appointed Executive Chairman of NSW Leaders, a business mentoring group for leading NSW businesses.

In July 2022, Craig West received the award of Doctor of Business Administration for his research thesis titled “Examination of the key factors driving business exit options in Australian Small and Medium Enterprises.”

Craig is passionate about encouraging business owners to think strategically, maximise the value of their business and achieve a successful exit.

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