Small and midsize businesses (SMBs) often operate solely to fund the owner’s lifestyle, but the most valuable companies are run with financial rigor. You may be years away from selling, but formalizing your operations now will significantly impact the future of your business.
When it is time to transition the ownership of your business, you will receive substantially more for what you’ve built because acquirers pay a premium price for less risky companies. Nothing gives a buyer more confidence than clean books and proper record keeping!
The Birth of Blinds.com
Jay Steinfeld’s leadership is a great example of how to run a business like a public company. Steinfeld studied accounting at the University of Texas and joined KPMG after college. His wife owned a small retail store selling blinds and window treatments.
In 1994, Steinfeld discovered a Seattle-based outfit that was trying to hawk books online. When this company (with the peculiar name “Amazon”) started successfully selling books online, Steinfeld wondered if he could get consumers to buy blinds online. Soon after, Blinds.com was born.
Wealthpreneur Spotlight
Jay Steinfeld Leads from the Core
As founder and CEO of Global Custom Commerce (GCC) d/b/a Blinds.com, Jay Steinfeld was an early mover in e-commerce. In 1993, he bootstrapped his website – built for just $1,500 and operated from his garage – into the world’s #1 online window coverings retailer.
In January 2014, GCC was sold to Home Depot. Steinfeld joined the Home Depot Online Leadership Team and continued to lead GCC as its CEO for over 6 years.
GCC integrated its proprietary technology and sales platforms into Home Depot’s enterprise systems (e.g., website and 2,000 stores, used by its 450,000 associates). This enabled GCC to become Home Depot’s Center of Excellence for configurable products including blinds, decks, storm doors, countertops, vanities, and more.
Steinfeld is an E&Y Entrepreneur of the Year and was awarded the Houston Technology Center’s Lifetime Achievement Award. His book, Lead from the Core: The 4 Principles for Profit and Prosperity, was a Wall Street Journal bestseller. He is the also the author of over 100 articles for CBS MarketWatch and Inc. magazine.
It Pays to Think Like an Accountant
Unlike many first-generation online companies that were run with few financial controls, Steinfeld grew Blinds.com like an accountant. He was determined to run his business with the same rigor as a publicly listed company. He built an experienced management team and assembled an outside board of directors even though Blinds.com was privately owned (and Steinfeld owned all the stock).
The board met quarterly and each of Steinfeld’s senior managers was asked to prepare and deliver a formal presentation. Steinfeld hired a Big Four accounting firm to complete a full audit of his financials each year, even though all he needed to satisfy the IRS was an annual tax return.
By 2014, Blinds.com had grown to 175 employees and was the largest online blinds retailer in America (posting more than $100 million in revenue). Even though Home Depot had close to $90 billion in sales at the time, Blinds.com was outperforming them in its tiny niche. Their outperformance coupled with their fastidious bookkeeping made Blinds.com irresistible to Home Depot. On January 23, 2014, Home Depot announced its acquisition of Blinds.com.
How can you make your company more valuable?
Running your private business like it’s public will make it more predictable as you grow and significantly more valuable when it is time to sell. Have you identified what factors you need to focus on to increase your business value? Conducting an annual business valuation will help you with this process. Valuations highlight risk areas, show business improvements, and help ensure your goals are met. Even if you are not planning to exit your business soon, knowing what your business is worth is a crucial next step.
