Go on a 4-week vacation!
Seriously… Until you, the owner, can take a 4-week vacation, your business is still too dependent on you and therefore is potentially worth 1-2 multiples of your cashflow LESS than if you take that vacation!
As a business broker and business coach I have a very unique perspective on small business ownership… I get to see businesses that are just getting started, decades old and will be run by the same owner for a few more decades, and businesses in the process of being sold to a new owner. No matter where your business is, it is never too early to have a plan to make your business NOT dependent on you, the owner. (Can you see where I’m going with the mandatory vacations, yet?)
There are 3 main reasons for this:
- You’ll be more satisfied because you’ll have to work less.
- Your team will be more effective since they’ll have ownership of their jobs.
- Your business will be worth more when it is time to sell.
Unfortunately most small businesses are heavily dependent on the owner. The owner is needed to sell, service, or deliver the products or services of the business OR the customers and team expect the owner to make important decisions and solve problems. If this sounds like you, let me hit you right between the eyes; you have a BIG problem that you need to start changing right away. If you wait until you’re ready to sell or retire to start transitioning yourself out of your business, then your selling price will be lower. Trust me, I know this from direct experience selling small businesses.
Now that you’re ready to start engineering a business that runs without you, here are the first 3 steps.
- Stop using the term “owner” – Throw away every business card that says this. Train yourself to never respond as “owner” when someone asks. If your sales pitch includes, “and you get to deal directly with the owner if there’s a problem,” immediately stop saying that. Give yourself a new title like Team Leader, General Manager, President, or CEO and NEVER use the term owner again.
- Empower your employees to take ownership – If your employees know you’re the one to solve all problems, you need to start changing that immediately. Empower them to make decisions. Some decisions will be good and some will not. In the long run you’ll have less on your plate, your team will feel more involved, and your business will be more sellable. Utilize procedures, scripts, and checklists to help your team members feel more confident with their power and to make sure everyone colors inside the lines.
- Train your customers to not rely on you – Believe it or not, your customers will do whatever you train them to do. If your customers are trained to call and ask directly for you (or the owner), you need to stop that right away. No one should ever need to talk to the owner because the Team Leader (or whatever title you choose) or someone else on the team should be able to take care of any problem. Ultimately you’ll replace yourself with a different Team Leader to completely transition yourself out of the business. At that point your customers will be trained to ask for the Team Leader, not the owner or you personally. In the mean time, train your employees to ask everyone, “What did you need help with today?” before transferring a call to you. If necessary, have your staff tell the customer, “Bryan will be tied up all afternoon. Give me a minute to direct you to someone else who can help.” If he still insists, when you do call him back, apologize for the delay and let him know the name of the person on your staff who can help him more quickly next time and that she will be expecting his call. For a big account, have your employee call the customer and introduce herself.
In my experience, the BEST way to accomplish #2 and #3 above is to take regular vacations. It forces your team to get used to solving problems on their own. More importantly, it forces you to NOT solve every problem. We entrepreneurs always want things done “our way” however if you want to build a sellable business, it will be worth more if it can run without you.
One last suggestion. After you return from each vacation, make notes on exactly what was waiting for you when you returned. Then humanize or systematize every item on the list so someone else can take care of that task the next time you leave.
To your vacationing success, Bryan
P.S. If you’re not the owner of a business but are instead the current GM or Team Leader this blog applies to you, too. Use this information to start transitioning “lower level” work away from you to other people on your staff. This will allow you to focus more on growing the business.
P.P.S. If you’re considering selling your business in the next 5 years, sign-up for my email course to learn exactly what you need to do to prepare your business to maximize your sale price.