Growing a Generational BusinessChia-Li Chien, Ph.D., CFP®, PMP®, CPBC
Increase your business value by tending to your Triple Bottom Line
Chia-Li Chien | May 24, 2011
Longwood GardenMany moons ago, when my husband T.C. and I were dating, we went to Longwood Gardens for our first time. On this year’s spring break road trip, we thought it would be an educational stop for my daughter, who is taking an advanced horticulture class in high school. Since it had been more than twenty years since we were there, and I wasn’t sure if I could recall what the gardens looked like, other than remembering a lot of walking and magnificent flowers.
On the day of our visit, we arrived at the gardens before noon, coming from DC, and it was already packed with tons of people, even on a Tuesday. Mr. Pierre du Pont bought the property in 1914, and in 1946 began officially operating the gardens as a non-profit organization open to the public. By 1955, the gardens were professionally managed and today demonstrate solid revenue streams such as:
• Membership in the Gardens: to enjoy the Gardens and many of the some 800 annual performances, events and horticultural programs.
• The American Horticulture Educational Programs: as many as 5,000 students a year attend continuing education classes designed for both amateur and professional gardeners and nurserymen.
• Extensive performing arts programs and special events.
Longwood GardenIn both the for-profit or not-for-profit business worlds, I’ve observed that often it takes at least a good five to ten years to get the business to certain value level. In the case of Longwood Gardens, it was more than forty years from the inception of one simple vision – conservation – to get to that optimum level of value.
Many business owners with second-generation family involved understand that not everyone, even if they are family, is cut out to be entrepreneurs. I see many businesses overlapping into the second generation before the business is valuable. Sometimes, it might take twenty or thirty years to get there if the second generation, meaning either children or children of other relatives, have yet to mature enough to operate the business. Yes, mature.
I should also mention that Longwood Gardens have been funded by Mr. Pierre du Pont’s family fortune, including the DuPont Company. With the right capital and the right second-generation team in place, Longwood Gardens has become what it is today. But do you, the small to mid-sized business have such capital, or for lack of a better word, the time, to build your good business into one that is valuable?
So what makes a good business valuable? I call it Triple Bottom Line or TBL. You see, when you build your business with the right foundation, it’s all about how much control you have over the business. The Triple Bottom Line represents the elements you may actually not have much control over. Perhaps you have influence, but not control. Let’s take a look at Longwood Gardens as an example.
TBL 1: Customer’s top choice to do business with: I believe Longwood Gardens are most likely horticulture enthusiasts’ top choice to visit due the to availability of continuing education curriculum. There are also people like me who enjoy horticulture and love to visit gardens like this one.
TBL 2: Employee’s top choice to work at: Not only do their employees love to work at Longwood Gardens, but they also have volunteers who contribute more than 30,000 hours every year just to keep these gardens a top choice.
TBL 3: Investor’s top choice to invest in: As a part of the non-profit world, private foundations or public grants continue to support the Longwood Gardens organization. As a leader in their field, I’m sure they also enjoy a fair amount of investments.
Longwood GardenIn the small to mid-sized business world, you can most likely relate to the triple bottom line. The question is “how do you know?” It’s not about just conducting a survey to find out if you are your customers’, employees’ or even an investor’s choice. You have to build the right foundation to achieve this status. Please refer to my article “5 Deadly Business Sins to Avoid” for the basic foundation of building a valuable business.
Perhaps you’re not in business to build a long-lasting legacy such as Longwood Gardens. But if you were, how long do you think it would take you to reach the ultimate “triple bottom line?”