Small Business Buying, Building and Selling

As a business builder, the goal of every business you buy should be one of 2 things:

1. Resell it quickly (within 12 months) for a substantial profit.
2. Keep it as a great cash producer with minimal work on your part.

This blog is going to focus on one of the most important parts of achieving step 2 above – getting your office used to running without you! For this to happen, you MUST set a goal of being out of the office for at least a few days (preferrably a week) per quarter. If you’ve never done that before, choose a week in the next 3 months and write it on the calendar right now! Seriously, if you don’t make the commitment to be out of the office right now you may never do it. Don’t worry. You will not be 100% prepared for the office to run by itself the first time. Or the second time. Or maybe even the third time. However, each time you’ll learn what your team relies on you for. As you learn more and more what items they just HAVE to call you to take care of, you will immediately know which items you need to create procedures for to replace you. If procedures won’t cut it, you need to pay someone else to make those decisions for you.

Now let’s look at what’s necessary for you to leave the office while your business keeps making money. Firstly and most importantly, you cannot be the one responsible for direct customer interaction. Whether that means taking care of customer service issues or selling your product, if you’re the only one capable of that, then you have a problem. You need to learn how to replace yourself right away. OK, so you’re not looking to retire so what are you allowed to do? Anything that doesn’t require you to actually be in the office. In other words, all of the tasks that can be done or maintained remotely.

A few of those items that I work on regularly when I’m out of the office are the following:

1. Paying bills – I do this with Quickbooks Pro and Wells Fargo Online Bill-Pay. I can pay my bills electronically from anywhere. My office administrators put all the bills into Quickbooks and scan all of the bills onto my server so I can actually look at every Purchase Order, Order Confirmation, Packing Slip, and finally the Invoice before I pay anything.
2. Working on marketing - whether it’s updating the website or working on new direct mail campaigns all I need is internet access and my laptop to work on almost any marketing our company might be doing.
3. Reading and responding to emails – This can always slow down your “productivity” when you’re in the office so a few quick minutes in an airport or in the morning before you hit the beach can help you remain “productive” all day as people are reading and responding to all of the emails you’ve sent out.
4. Keeping an eye on daily, weekly, or monthly tasks – Since I’m the Team Leader at my business there is no one else to take over management functions while I’m not there. For that reason, all of the girls who work in my office email me their “To-Do” list every evening before they leave. That way I can review and update it at my leisure. I also review our service schedule, inventory, receivables, payables, customer complaints, new leads, and a host of other things remotely. One girl in my office compiles the reports weekly and emails it to me so all I do is read them and make decisions – No matter where I might be sitting when I read those reports. Check out the “Know your numbers” section of my blog on weathering the economy for a better idea of what numbers I watch.
5. Staying in touch with team members – Whether that means calling, emailing, or reviewing performance there’s a whole lot you can do to make sure everything is “business-as-usual” when you’re not around.
6. Finding new business opportunities – If you aren’t ready to retire with all the money you have in the bank, you should always be researching new opportunities. As a matter of fact, the number one reason you need your cashflow business to run without you is so you have time to invest buying, building, and selling other businesses.

How to make sure your business is “running without you”.

1. Leave the office – But don’t just stay at home. If you’re in close proximity to the office both you and your team member’s will be too reliant upon you.
2. Try not to answer your phone – Let it go to voicemail, listen to the voicemail and respond appropriately. If possible, respond via email or text.
3. Make yourself available via email (IM if necessary) – I prefer written communication because it’s short and to the point (no time for small talk) and because it’s all tracked. Someone can’t tell you you never told them to do X or Y.
4. Have access to important information on your server – Whether that means having your invoices, inventory, schedule, or incoming leads on the computer. Whatever is important to you, you need to make sure you have access to at all times. If you can’t get to your important information from anywhere at anytime you’ll never be able to work remotely.

Have you ever had one of those days where you have a list of things to accomplish and at the end of the day the list hasn’t gotten any shorter? You just worked on “little things” all day. It’s amazing to me how many of those “little things” take care of themselves when I’m not around… In my experience if I leave the office for 2 days or 2 weeks, if I’m keeping up on things day-to-day while I’m gone, my list of “catch-up” work when I return is the same length. The list is limited to the items only I can handle. There are no “little things” on my list to catch up on… Every time my list consists simply of the things only I can do. (With the goal being to shrink that list with every trip.)

Since I track customer complaints AND testimonials if there were problems created by me not taking care of those “little things” I’d know about it, too.

So make a commitment to be out of the office!

To your “remote management” success, Bryan

P.S. When you go to sell your business do you think it’s going to be worth more or less when you show the buyer that it can be managed, to a large degree, while sipping red wine on the balcony of your hotel in Italy?

Freedom. I could stop my blog there, however I like to write too much…

Freedom to do what I want, when I want, how I want. If I find a motorcycle for sale 1500 miles from home (as I just did) and I want to take off a few days to go pick it up and ride it home (as I’m doing this week) then I want the freedom to do that. In other words, freedom with my time. Nothing is more important then that. You can always get more money, you can never get more time.

Financial freedom. This one should be simple to understand. After all I can only do the things I enjoy (traveling, photography, motorcycling, coaching, reading, writing, adventure-sports etc.) if I have the money to afford those things. Is there a better way to get both financial freedom and control of your own time than being a business owner?

So that explains the Buy and Build portion, but what about Selling? What does that have to do with freedom? Most businesses have a certain point at which they’re about to hit “critical mass”. Simply put, that business is ready to explode and just needs the right leader at the helm to guide it along. Rarely do businesses have 2 different points of critical mass, however. In other words, if you find a business that has a great need, is in a great market, and has the potential to double or triple in under 2 years, the chances of doing that again at the end of those 2 years is very slim. However, there are always other business’ available where that is true. You just have to find them before the point at which they hit that critical mass and then sell them at their peak (since the sale price will be based on that most recent sales history).

The other reason for selling is that it gives you complete freedom with your time once again. If you buy, build, and sell a business and cash out a short while later with a few hundred thousand dollars (which is very possible) now you can go buy another business, do the same thing all over again, and make more money… Or you can take a vacation. A trip around the world. A missions trip. Buy that car you always wanted, etc. etc. etc. As Timothy Ferriss points out in The 4-Hour Workweek: Escape 9-5, Live Anywhere, and Join the New Rich, the New Rich don’t save their whole lives so they can hopefully retire and, at 65-70 years of age, start enjoying life. The New Rich understand the goal isn’t a certain amount of money in your bank account, but the amount of freedom you have with the money you make. The New Rich don’t save up for retirement because they take mini-retirements all the time. It could be every year, every 6 months, or every other year. That mini-retirement could be for a month, a year, or 10 years. Now is the time to live your life. Not when you’ve saved up enough vacation days or have $1 million in the bank.

Since buying my 2 most recent businesses, I’ve taken trips to Pennsylvania, Florida, Texas, and am taking another cross-country trip this week. All of those trips required me to be out of the office for anywhere from a day to 7 days (the total will be about 3 weeks). They’re all within 5 months of me buying my first business. In the interest of full-disclosure, when I have been at the office, 7 day work-weeks with 14 hour work days are quite frequent.

So how does one setup their business and life to have those freedoms?

1. You have to be willing to step away from a mistake.
2. You must never lose track of your goal.
3. You must be able to work remotely.
4. You must empower your people.
5. You can NOT be the expert at the product or service of your business.

In a bit more detail:

1. If you buy a business, work 60-80 hours per week, and 6 months later haven’t made any significant progress, you need to get out. Take from that experience what you’ve learned and apply the lessons to the next one. Don’t toil for years. It doesn’t take that long to start seeing specific improvements (i.e. more cash in your pocket and more freedom with your time).
2. For me this is easy. When I was 19 I was diagnosed with Hodgkins Lymphoma. I didn’t think it was that big of a deal. I went through chemo for 6 months and radiation for 3 weeks. It wasn’t fun, but I survived. It never felt to me like it was a near-death experience until 3 years later… My friend, Lindsey Popelas, was 17 at the time of her diagnosis which came within 2 weeks of me learning the same news. After battling for 5 years, it took her life. Why didn’t it take mine? For whatever reason, the Lord wants me here and I KNOW its not to work for 60-80 hours per week for the next 40 years to save up $2 million to retire. Lindsey reminds me of that every day. For that she may be the most influential person I have ever met. That’s a lesson I will never forget. My goal is to have freedom – not job security. Don’t wait till you acquire a deadly illness to resolve to start living your life.
3. Blackberry’s, servers, ubiquitous internet, GPS tracking, Virtual Assistants, IP phones, etc. etc. etc. make working remotely on almost any business a reality. Start making it your reality.
4. If your whole team must look to you to take care of every customer complaint and handle every supplier issue and tell them what to do every day, then you have no freedom. Empower your people to make decisions they can effectively make and then use technology to encourage and monitor them.
5. If you’re the salesman, serviceman, customer service specialist, designer, engineer, doctor, lawyer etc. for your business then what happens when you’re not there? The goal is to leverage the talents of others so that you don’t have to be an expert at anything – except leading and leveraging the talents of others.

The only exception to selling your business is to keep it if your business is on auto-pilot and can work without you or with very minimal input from you. Neither of my businesses are at that point yet. However if I can’t get them to that point then you can be certain I will sell them, take a mini-retirement, and keep my eyes open for the next opportunity.

To your success, Bryan

P.S. In previous jobs of mine I have earned the ability to work remotely from my basement, take vacations when I want, travel extensively, and still make a considerable living. The hardest thing for every business owner is to find and rely on great quality team members. If you’re one of them, then you’ll be amazed at the freedoms your boss will be willing to provide for you.