Five Ways to Ensure Your Business Can Run Without You
We’ve addressed in the past the difference between having a true business versus just having a job within your business. The more a business can run without the owner involved in its direct operation, the more value the business has to the owner and any eventual acquirer.
Some 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 not dependent on its owner is the ultimate asset to own.
Here are five ways to set up your business so that it can succeed without you.
1. Give employees a stake in the outcome. A company’s greatest asset should be its employees. As a business owner, you need to work on creating an ownership culture inside your company: You are transparent about your financial results, and you allow employees to participate in your financial success. This results in employees who act like owners when you’re not around.
2. Get them to walk in your shoes. If you’re not quite comfortable opening up the books to your employees, consider a simple management technique in which you respond to every question your staff brings you with the same answer: “If you owned the company, what would you do?” By forcing your employees to walk in your shoes, you get them thinking about their question as you would, and it builds the habit of starting to think like an owner. Pretty soon, employees are able to solve their own problems.
3. Vet your offerings. Identify the products and services which require your personal involvement in making, delivering or selling them. Make a list of everything you sell and score each on a scale of 0 to 10 on how easy they are 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.
4. Create automatic customers. Are you the company’s best salesperson? If so, you’ll 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. Consider creating a service contract with your customers that offers to fulfill one of their ongoing needs on a regular basis.
5. Write an instruction manual for your business. Finally, make sure your company comes with instructions included. Write an employee manual or standard operating procedures (SOPs). These are a set of rules employees can follow for repetitive tasks in your company. This will ensure that employees have a rulebook they can follow when you’re not around and that when an employee leaves, you can more quickly swap them out with a replacement to take on duties of the job.
You-proofing your business has enormous benefits. It will allow you to create a company and have a life. Your business will be free to scale up because it is no longer dependent on you and you are no longer its bottleneck. Best of all, it will be worth a lot more to a buyer whenever you are ready to sell.
If you are interested in learning more about how to increase the value of your business, take the Value Builder assessment on our website and see where you score.