Three Issues Plaguing Business Owners in the Heating Fuel and Energy Industry and How to Overcome Them
Business owners in the heating, fuel, and energy industry are much like chefs in a busy kitchen, constantly juggling multiple demands requiring their attention, including political and industry changes, day-to-day operations, customer perceptions, and employee and leadership dynamics. As such, owners can often wonder which end is up, what is the best direction forward, and, especially in a multi-generational family business, how do we keep this business going and growing.
While attending the 2023 Heat Conference, I was asked what the top 3 issues impacting business owners today are. After some thought, I answered:
Getting stuck in tunnel vision and vacuum thinking
Allowing the day-to-day overwhelm the strategic vision
Avoiding strategic succession planning & letting the chips fall where they may
The following are a few insights to help you identify if you and your business are getting burned by one of these issues and how to set yourself up for success.
Issue #1 Tunnel Vision:
Feelings of overwhelm, only seeing issues and no solutions, doom, and gloom, high employee turnover
Antidote: Identifying the Trees from the Forest
Tap into the expertise of seasoned owners and industry experts through state and national associations. These professionals bring a valuable third-party perspective, helping you assess your organization’s strategic position, identify resource requirements for growth or transition, and explore options. By stepping back from the day-to-day and engaging in strategic planning, you can better understand your business and its potential.
Start by asking yourself important questions, such as:
What is the purpose of your business beyond simply selling propane, oil, or whatever your specific product is to your customers?
What value does your business offer that sets you apart from competitors?
What are your organization’s strengths and areas that need improvement?
How can you attract the best talent and customers and streamline processes and procedures to drive performance?
What political, technological, or other outside threats impact your business, and how can you diversify to mitigate the impacts?
By seeking expert insights, proactively addressing threats and weaknesses, maximizing your strengths, and taking a strategic approach to your organization’s growth, you can set yourself up for long-term success.
In a recent conversation series focused on “Creating Control Over Your Energy Business,” Doug Woosnam, a consultant with Cetane Associates, strongly recommends bringing in professional help while commenting, “The misconceptions about planning go back to the fact that generally, these owners are very strong entrepreneurial people who have made all of the decisions, and generally, they’ve done very well. But again, that doesn’t always lead to success.”
Marty Kirchner, Partner with Gray, Gray & Gray, warns against the biggest misconception about planning – thinking you have a plan when it’s all up in your head. “You’ve never actually taken the time to write it down and actually look at the pitfalls, the pros, the cons, the classic SWOT analysis.”
Woosnam goes on to explain that if you want to sell your business, you shouldn’t simply think that you can decide to sell today and put it on the market tomorrow. Instead, you need to plan and follow that plan to be successful.
Strategic planning with an outside facilitator encourages creative, problem-solving thinking. Through this approach, you, your key leaders, and your team of advisors can identify multiple strategies to ensure your business continues for as long as you want and or, you sell when you want at the highest dollar possible.
Issue #2: Day-to-Day Distracting Away from the Strategic Vision
Only working in the business versus on the business, no strategic plan or a strategic plan is not integrated into performance metrics, monthly conversations, quarterly meetings
Antidote: Bring Strategic Vision to the Forefront
Daily operations can steer an owner away from strategic initiatives. Customer and employee issues, equipment failures, supply chain dynamics, and simple issues such as the internet or phones going down are just a few of the many disruptions that are the daily business battles.
Building a strong leadership team and developing successors are crucial for driving business performance today and positioning the business for future growth. The strength of your leadership team and an owner’s ability to effectively delegate day-to-day responsibilities AND strategic initiatives is essential for multi-generational, capital-intensive complex businesses to survive and thrive.
Having the right people in place is crucial for sustainable growth. Relying on the success of a single individual is not a viable long-term strategy. By focusing on developing a strong team, fostering a leadership culture, and integrating your vision and strategic plan into weekly, monthly, and quarterly meetings, ensures your business can thrive even in the face of changes.
Issue #3: Avoiding Strategic Succession Planning
Avoiding conversations with family about performance, employment, and finances; allowing resentments to grow amongst family; no or, outdated business agreements, no leadership contingency plan, no succession strategy in place; lack of communication with key leadership or employees about the future of the organization, high employee turnover.
Antidote: Create the Future You Envision
Ignoring or hoping interpersonal family and management issues will work themselves out naturally in a family business environment generally leads to massive conflict disrupting business operations. Our world is ever-changing, and it may feel easier to mentally check out of the strategic issues and only focus on day-to-day operations; however, not deciding or not engaging is a choice to do nothing and let the chips fall where they may. Therefore, engaging in open and honest discussions with stakeholders, including family members, key employees, and trusted advisors, is essential. Additionally, seeking professional guidance to assess your business’s financial health, the probability of fulfilling your vision, and identifying what is getting in the way is crucial. Analyzing various scenarios and their potential impact on the business and your family can help you make confident decisions. In conclusion, taking proactive steps to address family and management issues can prevent a disjointed mess left to chance, which could potentially tear apart the business and the family.
Champ Rawls, a Succession Planner with The Rawls Group, emphasizes the importance of the strategic nature of succession planning. The process allows an owner to look forward and strategize around the possible, probable, and potential issues impacting the business’s revenues, profits, value, and sustainability. “Owners that are highly involved in the day-to-day operations of their business greatly benefit from a third-party perspective as it is common for owners to get dragged down by daily fires and not allow them to look forward at potential issues and opportunities.”
8 Steps to Create a Growth & Succession Plan
Determine Your Vision
Your vision may be to get out of the day-to-day so you can focus on strategic growth and mentoring, spend more time on hobbies and less time at work, or a combination of both. Whatever it is, it will involve some form of growth and change.
What is the WHY behind what you are doing now and what you want to be doing in the future?
Where do you see yourself in the next 5-10 years?
Share your vision with your trusted advisors
Lean on expert advisors and trusted leaders to provide perspective and support based upon where you want to go. Business, personal, and family success is not a solo endeavor; it requires a team effort.
Evaluate who and what will be impacted based on where you are now and where you want to grow and transition into
What resources do you need?
What infrastructure is required?
Develop a strategy with your team of advisors and key leaders to achieve your vision.
How will you develop or acquire the resources needed?
What is your 1 year, 2 year, 3 year strategy?
Who is driving each project, and how frequently will you meet to review the strategy?
Consider the possible, probable, and potential issues that can impact achieving your vision, such as:
Unexpected health scare or death of the owner/key leader
Inflation, recession, supply chain, technology, political or regulatory issues
Conflict with business partners
Family issues influencing or impacting business decisions
Issues with strategic vendor(s) impacting business performance
Develop A, B, C plans considering your Strengths, Weakness, and outside Opportunities and Threats, so that no matter what is thrown your way; you have options to fulfill your vision.
Lean on your team of expert advisors to educate you so you can make well-informed decisions
Re-evaluate your vision, and proceed where necessary through steps 1 thru 7
Contact Us, and we can help you with insights and other resources and see if it makes sense to work together. At the very least, in 30 minutes, you may get some ideas you can apply to your business immediately.
Cetane Associates: a unique group of fuel industry specialists armed with assets and proprietary processes that help them perform wonders for their clients
Gray, Gray, and Gray: With 77 years of experience working with fuel oil and propane marketers and convenience store owners, Gray, Gray & Gray has established a reputation as the energy industry’s leading accounting, consulting, and business advisory firm.
Succession Readiness Survey: A 7-minute investment in time will put you in an informed position of opportunities many business owners overlook, impacting business value, growth, and lifestyle, and ultimately achieving your vision.
Contact a Succession Planner: The Rawls Group can help you with insights and other resources and see if it makes sense to work together. At the very least, in 30 minutes, you may get some ideas you can apply to your business immediately.
The only constant one can plan for is change. Strategic planning positions the business to address the probable, possible, and potential contingencies impacting business success.