If you left your company, would it flourish or fold?
Your business is your baby. Whether you started it from scratch or bought an existing company, you’ve probably spent years nurturing and growing your business, leading it through challenges and celebrating its successes.
But just as with a human child, your goal with your business should be to raise it to where it doesn’t need you. Just as you want your children to grow into independent adults, you want to set your company up so it can function and flourish without you.
Doing that accomplishes two important things:
- It creates an asset you can sell.
- It frees you up to focus on the things you truly enjoy, both in and out of the business.
A business that is not dependent on the owner or founder is far more attractive to potential buyers than one that is so personality-driven that the departure of a key individual will seriously damage the operation. If selling your business is part of your plan, whether in the near future or years down the road, you need to structure it so it will continue to function and grow without you.
Here’s how to get started:
Examine what you’re doing and how you’re spending your time. What role do you play in the organization? What are your responsibilities? How much of that can either be automated or delegated? Figure out if you really have a business or if you simply have a job that you’ve created for yourself.
Review your financials from the perspective of a potential buyer. Is the company profitable? Are the income and expenses in line? Is everything being reported properly? If you’ve been comingling your business and personal finances, it’s time to get them separated.
Think about what you really enjoy doing. You don’t have to do things you don’t enjoy just because you happen to be good at them. Get those chores off your plate so you can spend your time doing things that bring you joy. For example, do you prefer product development over administration? Sales over finance? Delegate what bogs you down so you can soar with what you love. Not only will you be happier, but your business will grow.
With that information, you can put together a plan to essentially work yourself out of a job and build a business that serves you rather than you serving it.
Your plan will likely include investing in people and technology. You may think you can’t afford to hire people to do what you do, but what you really can’t afford is to stay stuck and stagnant, doing all the work. You need to equip others to do what you do and elevate yourself to where the business is not solely reliant on you and your time.
Don’t expect those people to perform at your level in the beginning. Give them grace as they learn and develop. They’ll make mistakes, and everyone will survive. They won’t do things exactly as you did, but if they ultimately get the job done, that’s what counts. And who knows—they might even do some things better than you.
If you have a family business that employs multiple generations, create a plan for protecting those people when the company is sold. Or, if your plan is for the adult child who works with you to inherit the company, be sure they’re equipped to take it over and run it successfully.
Things get more complicated when there are multiple owners. If you and your spouse own the company together, go through this process of replacing yourselves together so you can both leave if the company is sold. If there are other active partners, you need to communicate with each other and develop agreements to cover all potential exit scenarios.
Most business owners will find it difficult to transition their company into an operation that will not only survive their departure but will continue to grow. It means changing attitudes and habits. It means surrendering control. And it’s often a “two steps forward, one step back” process. But stick with it, because in the long run, the rewards will be more than worth it.
Related reading:
Can a System Designed for Business Work in Your Personal Life? (Entrepreneurial Operating System)
How to Streamline Your Charitable Giving (Donor Advised Funds)
