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5 Ways to Get Your Business to Run Without You
In my financial work with business owners, one of the first questions I ask is – “Can your company run without you?” I almost always get a funny look followed by a pause. The thought that initially crosses their mind is probably along the lines of wondering why their business would ever need to run without them. Unfortunately, however, this is something that must be considered as a central part of their business and personal financial planning. This is due to the fact that someday every business owner will step away from their company. This is inevitable and unavoidable. The only question is – will the eventual exit from their company occur according to a plan or by some occurrence that may or may not be expected or even prepared for?
What I try to convey to the business owner is that their company must be self-sufficient and able to operate without them. That’s not to suggest their company would be better off without them, but only that it should be able to function, grow, and hopefully even thrive without them.
As an owner of a martial arts business, your desire to own your own company most likely originated from your passion for the disciplines and life lessons you learned from the self-defense and fighting style your business is founded upon. Martial arts teaches, among many other things, self-reliance, and confidence in being independent, traits required to be a successful business owner. It can also be the ultimate liberator to be able to call all the shots with your own company. But any business, including a martial arts company, can seemingly trap you, as the owner, into devoting so much time and energy to growing and maintaining your company that other parts of your life can be a challenge to manage, even to the point of feeling like you’re neglecting important things outside your business.
In any case, a business not dependent on you as the owner is the ultimate asset to own. It bestows upon you complete control over your life so you can choose how best to spend your time for both the benefit of your company and everything and everyone else in your life.
To the degree this is a concern of yours, you may want to consider some ways to bring your business to the point it can run without you. A company that can run without its owner offers that owner a multitude of benefits having to do with enjoying a more independent lifestyle. Probably the best aspect of an owner-independent business is with respect to its value. A company independent of its owner has better, more measurable market value that can be leveraged for Net Worth purposes, seeking loans to operate and expand, understanding what insurances are needed and proper amounts, and for the purpose of someday leveraging the company equity to retire or move on to another venture. This last point is important because a business independent of its owner is worth a lot more than an owner-dependent company. Any person or entity that may desire to acquire your company at the point you may want to sell will have a greater interest in and assign a higher value to companies that, in essence, run themselves or at least can be run interchangeably with a person or people chosen by the acquiring owner.
Here are five ways to set up your business so that it can succeed without you:
1. Give your employees a stake in the outcome
Jack Stack, the author of The Great Game of Business and A Stake in The Outcome, wrote the book on creating an ownership culture inside your company. The premise is for you to be transparent about your company’s financial results, allowing your employees to participate in your financial success. This results in employees who act like owners when you’re not around. This can also be addressed by way of company retirement savings plan programs that incentivize employees by sharing some of the profits with them.
2. Get Them to Walk in Your Shoes
If you’re not quite comfortable opening the books to your employees, consider a simple management technique where 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 either 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. As a martial arts company, your revenue is probably based primarily on a subscription model that produces recurring income, but to what extent are renewals automatic and done without your intervention? Be certain your company operates according to a highly developed and efficient subscription model.
5. Write an Instruction Manual for Your Business
Finally, make sure your company comes with instructions included. Write an employee manual or what MBA-types called Standard Operating Procedures (SOPs). These are a set of rules employees can follow for repetitive tasks in your company. This will ensure employees have a rule book they can follow when you’re not around, and when an employee leaves, you can 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 valuable company and have a life. Your business will be free to scale up because it is no longer dependent on you, which can actually serve as a bottleneck. Best of all, it will be worth a lot more to a buyer whenever you are ready to step away from your company to retire or seek your next venture.