When starting a business, always begin with the end in mind, especially with your business structures. In the long run, you will one day want an offer on your business—that is how substantial riches are made. Even if you aren’t wanting to sell the business, you may still hand it off to a business partner or successor in the future.
Additionally, there is usually a period when the founder needs to move to one side and let the business advance and develop to a considerably more elevated level. Subsequently, even if you have owned a business for a considerable length of time, you ought to steadily be preparing it to be sold and to survive and work without you.
It is never too early or past the point where it is impossible to position your business to be sold.
Entrepreneurs and Business Owners: Be the Least Important Person in Daily Operations
I stress to each of my clients that in order to eventually have the company of their dreams—that is, a company that is truly worth a fortune and can be sold as such—their ultimate goal is to one day become the least important person to the day-to-day operations of the business. This is a hard concept for most business owners. We want to be important and needed – but that is the goal of having a job.
Your goal should be to have a successful business, not a job. While that may not seem clear, it makes perfect sense if you think about it. As an owner, you cannot afford to be at the center of every problem, every decision, every mess, and every transaction. If so, you will cripple the growth and development of the business and your employees. You should be needed and important, but not as a doer or Chief Everything Officer. You should be the leader, visionary, and owner.
Don’t Be the Barrier in Your Business.
Your business cannot depend on your presence, personality, skills, and problem-solving, especially in the long run. Any dependence that your business or employees have on you being there every day will only hurt the business as time passes. As such it’s best to structure your business to be owner-independent and to not just be working for your business but make your business work for you. Have the business be subject to the structures, procedures, frameworks, and individuals you have put in place. Turn your business from one that is owner-dependent and draining to a self-maintaining, money-streaming machine.
When you can state you are no longer the most imperative individual to the day-to-day activities of the business, it will be a delight to own and manage. When you reach this point you will have a true asset that you could sell for a significant sum. Since your business is where you want to create your real wealth, you need to position yourself to generate as much equity in it as possible. It is like a house: it is not the value of it that matters, it is the equity that you have in it.
The truth is that a company is never worth its full value to a buyer if you (the current owner) have to come along in the purchase to make it run. No one wants to buy your JOB or a broken business. If you find someone who does, they will be willing to pay very little for it.
Structure Your Business to Be Owner-Independent
- Develop Robust Systems and Processes:
- Document and streamline business processes for a systematic approach.
- Implement technological solutions to automate repetitive tasks.
- Build a Strong Management Team:
- Recruit experienced managers to oversee departments.
- Foster a collaborative and communicative leadership culture.
- Use this team to delegate responsibilities effectively
- Establish Clear Policies and Procedures:
- Develop comprehensive policies and procedures for decision-making.
- Create a framework for employees to handle routine issues independently.
- Invest in Training and Development:
- Provide ongoing training to enhance skills and knowledge.
- Encourage cross-training for flexibility.
- Implement Performance Metrics:
- Set measurable performance metrics for departments and employees.
- Use data-driven insights for improvement.
- Utilize Outsourcing and Freelancers:
- Outsource non-core functions to specialists or agencies.
- Hire freelancers for specific projects.
- Create a Knowledge Repository:
- Develop a centralized repository for information and best practices.
- Facilitate knowledge transfer through training sessions.
- Establish a Strong Company Culture:
- Cultivate a positive, inclusive, and accountable company culture.
- Have a clear vision and mission statement for your company, and communicate it.
- Foster a sense of pride and ownership in employees.
- Strategic Planning for Succession:
- Identify potential successors within the organization.
- Develop a succession plan for leadership transition.
Strategic Business Structures: Start with the End in Mind
Growing an effective business resembles bringing up and cherishing your children. As a parent, it is important to start with the end in mind, that of raising independent, self-sufficient, wonderful adults. Business is the same. Work to give your business the proper foundation and training so that it can fly on its own. And just like a parent, you will enjoy your child (the business) and be richly blessed by it.
Give your business a chance to grow up solid, independent, and autonomous by working to become the least important person in the day-to-day operations.
Need a good kickstart to thinking and acting like a CEO? Call Weaver Business Coaching Today.