Most of us running a small business are obsessed with making more sales, growing profits and paying the least amount of tax possible.
But have you considered the biggest risk in your business? Guess what, it’s you!
If you want to build a business you can sell one day for a sizable sum, one of your most important goals should be to make your business run without you.
So how can you help it thrive and grow when you are not there?
The ultimate asset: a business that runs without you
A business 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.
And, when it comes to getting out, a business independent of its owner is worth far more than an owner-dependent business.
A lack of action here could result in a huge financial let down for you in the future: any potential acquirer will lower their offer if your business is overly reliant upon you being there.
But is not too late to address this. Following are five ways to set up your business so that it can succeed without you…
1. Give employees a stake in the outcome
Jack Stack, the author of The Great Game of Business and A Stake In The Outcome, wrote the book on creating an ownership culture inside your company.
If you are transparent about your financial results and allow employees to participate in your financial success, this results in employees who act like owners, even when you’re not there.
2. Get them to walk in your shoes
If you’re not yet comfortable enough to open up the books to your employees, consider a simple management technique where you respond to every question your staff bring you with the same answer, “If you owned the business, what would you do?”
By forcing your employees to walk in your shoes, you get them thinking about their question as you would. It builds the habit of starting to think like an owner.
Pretty soon, employees are able to solve their own problems …but be patient with this one.
3. Vet your offerings
Identify the products and services that require your personal involvement to make, deliver, or sell.
Make a list of everything you sell and score each on a scale of 0 to 10: how easy are they to teach an employee to handle?
Assign a 10 to offerings that are easy to teach employees and give a lower score to anything that requires your personal attention. Commit to stopping to sell the lowest-scoring product or service on your list.
Repeat this exercise every quarter and you’ll get closer to a business that runs without you.
4. Create automatic customers
Are you the company’s best salesperson? If so, you’ll need to fire yourself as your company’s rainmaker if you want to make your business run without you.
One way to do this is to create a recurring revenue business model, where customers buy from you automatically.
Consider creating a service contract with your customers that offers to fulfil one of their ongoing needs on a regular basis.
5. Knowledge capture
Make sure your business comes complete with its own instruction manual. There are some awesome cloud-based knowledge capture tools to help you, including Evernote and Get Guru.
These can be used to document everything from the vision of the business to customer acquisition strategy, operations, product innovation or procurement, staff training and recruitment, marketing, sales and finance.
By doing this, you will create a ‘rule book’ for each of the key business areas; your employees can use it so that they don’t interrupt you 100 times a day.
Do the hard work once and replace the knowledge in your head with a business knowledge WIKI that current and future employees can access when you’re not around.
‘You-proof’ your business
You-proofing your business has enormous benefits but it takes time to implement. Invest the time and it will allow you to build a business AND have a life at the same time.
Your business will be free to scale up because it is no longer dependent on you (probably its main bottleneck).
Best of all, it will be worth a lot more to a buyer whenever you’re ready to sell.
Planning a successful sale of your business takes years, not months. If you want to discover how to avoid the owner’s trap and build a business that you can sell for more than you thought was possible one day, book an initial 15-minute strategy call with us today.
To your success!