Some business owners focus on growing their profits while others are obsessed with sales goals. Have you ever considered making it your primary goal to set up your business so that it can thrive and grow without you?
A business that is not dependent on its owner is the ultimate asset to own. It allows you complete control over your time so that you can choose the projects you get involved in and the vacations you take. When it comes to getting out, a business independent of its owner is worth a lot more than an owner-dependent company.
So, ask yourself these three key questions
- Are you the primary reason for your company’s ongoing growth?
- Have you built a management team that understands your company inside and out?
- Are the processes that make your business tick documented, or do they reside solely between your ears?
If you feel your business suffers from a severe case of owner dependence, here are helpful ways you can reduce this reliance so that it can succeed without you.
Build your management team
First things first – build the key players in your team. Hiring the right people that are passionate about your industry and understanding how your business works is critical in demonstrating its future success to potential buyers. These will be the people that will build on the foundations you laid for your business, contributing ideas, hard work and taking responsibility for its long-term growth. Hopefully, by choosing the right people, your business will run smoothly whether you’re there or not.
Delegate, delegate, delegate
It is not enough to simply hire the right people; you need to empower them to make decisions. Of course, it can be difficult to delegate responsibilities when you believe you know how to run your company better than anyone, but, a buyer needs reassurance that your business will operate well without your presence.
Create automatic customers
Are you the company’s best salesperson? If so, you will need to fire yourself as your company’s rainmaker in order to get it to run without you. One way to do this is to create a recurring revenue business model where customers buy from you automatically.
Write an instruction manual for your business
Make sure your company comes with instructions included. Write an employee manual or Standard Operating Procedures (SOPs). This is a set of rules employees can follow for repetitive tasks in your company. This will ensure employees have a rule book they can follow when you’re not around, and, when an employee leaves, you can quickly swap them out with a replacement to take on duties of the job.
Train junior talent
If you have got a good procedure for what you offer, you don’t have to hire the best talent. You only have to hire competent and passionate people. Yes, you have to manage these people, but think of yourself as a leader who sets a tone within the whole company. This tone, according to Thom Elicker, involves planning, predictability, control and culture.
- Planning – You have a flexible structure and guidelines within which people work. This includes a budget and product development plan.
- Predictability – This means you produce consistent and reliably good products and services and don’t change the rules on the employees.
- Control – Everybody understands the company goals, the product development process and the hiring procedures. It’s your job to make sure these goals are clear and understood by all.
- Culture – Each company is unique when it comes to culture. Some are strict, while others are more relaxed. You are responsible for the culture.
This tone colours the environment within which your junior talent works, so make sure it’s a healthy and sustainable one.
Document required systems for repeatability without you
Each of us has our own way of executing tasks. Often, these get left undocumented and non-transferrable without our continuous involvement. A quick tip: It’s easier to use screen-captures and notes to document existing processes, rather than writing detailed manuals. Take the time to note your procedures down to help familiarize interested parties, as well as bring potential new members of your management team up to speed quickly. We understand that most entrepreneurs loath “paperwork” like this. However, if you take the time now to document your procedures, it will pay off handsomely when you negotiate with buyers later.
Adjust roles and shift resources for optimal performance
To get maximum business autonomy, you need to match the inherent strength traits of employees to key jobs, always adjusting for market change and people growth. Have the right people do the right things at the right time.
Free yourself from the need to always be at work
Your ideal business is one that delivers consistent results including growth goals, without your active involvement. The final step is to create a business “dashboard” that enables you, and everyone else there, to stay on top of the business from anywhere. The final big hurdle to overcome is you.
Many entrepreneurs can’t get over their egos, or their fears, that the business can’t operate without them. Some are just stuck. Rest assured that your best path to business success, as well as your personal satisfaction, is to work on making your business work without you, rather than working harder on the business.
Build with the exit in mind
Finally, it’s essential to take the mindset that you will one day exit your business. It may not be tomorrow, next year or in the next ten years, but it will happen, which is why it’s vital to prepare for it now. This approach will ensure you follow the above steps – by building an effective team around you, as these human assets will enhance your company’s valuation.
Overall, this attitude will help you avoid the red flags buyers pick up on and will end up enhancing the appeal of your business.