Do You Own a Business or Do You Really Just Have a Job?
In working with business owners on either the sale of their company or improving the business’ value, a recurring complaint is that the owners feel handcuffed to their business. They can’t get away for any prolonged vacation time, they are working excessive hours or they feel that for the business to operate effectively, they need to have their hand in all aspects of the operation.
Whether you want to sell next year or a decade from now, you must be building an asset someone would buy — otherwise, you have a job, not a business.
Here are eight characteristics that ensure you are building a company, not just performing a job:
- A job requires that you show up at work to make money, whereas a company generates revenue whether you are there or not.
- If your company is so reliant on a single customer that it can dictate how you deliver your product or service, your company is more like a job than a valuable business.
- A job is a place where your personal reputation impacts your results, whereas a company is a place where the brand is more important than the personality of the owner(s).
- A job requires you to use your personal experience and expertise to get a result. A company is a place where a process — not a person — consistently produces a desirable result.
- In a job, you can get fired for taking too much vacation, whereas if you own a company, the more vacation you can take without affecting your company’s performance, the more valuable your business will be.
- In a job, the harder you work, the more money you earn. In a company, the smarter you work, the more money you earn.
- In a job, you solve the problems. If you own a company, your employees solve the problems.
- If the majority of your customers know your mobile phone number, it’s likely you have a job, not a company.
Business owners need to be prepared with a clear exit strategy, and part of that is increasing the value of their business. You might not be interested in selling your company now, but no one plans for an illness or accident that may force an owner into selling. Also, no one really prepares for a competitor or strategic buyer to come knocking on the door with an unsolicited offer to purchase.
These are some things to consider and why an owner needs to be building a business instead of working at a job.
If you’re not sure whether you have a job or own a business, it’s time to get your Value Builder Score. Whether you want to sell now or are planning for an eventual exit from your company, the Value Builder Score assessment allows you to see your business as a buyer would see it and identifies how you perform on each of the eight key drivers of company value. The questionnaire is free and takes about 13 minutes to complete. After you’re finished, you’ll get a customized 27-page report outlining how you performed and where you could improve the value and salability of your company. If interested, just reach out to us.