As an Entrepreneur, there are so many things that need your attention.
Monitoring cash flow, hiring the right people, marketing your business and so on. In my travels as a business coach I’ve learned that there are many similarities among owners and the issues they face, no matter the industry type or size of the business. I’m going to touch on a common problem among business owners, that if corrected can truly make the difference between being able to sell the asset, whether internally or externally.
John Warrillow, a popular business writer and entrepreneur himself, wrote a book called “Built to Sell” which tells the story about a business owner who turned his company around and not only made his business a sell-able asset (with the help of a coach) but sold it for a much higher multiple than he ever dreamed possible. John emphasizes the 8 factors that drive value in a business.
I’m going to start with a factor called, “Hub and Spoke” or how dependent is the business on the owner?
Ask yourself these questions and see if you are susceptible to the “Hub and Spoke” cycle.
- How often do you take a vacation without taking calls from the office?
- Do you sign all the checks?
- Do your customers/clients usually ask for you?
- Do you get cc’d on more than 5 emails a day?
- Are you at the hub in your business and your employees are mere spokes who can not operate independently of you?
- How emotionally attached are you to your business? Has it become your sole identity?
Your answers to these questions can determine whether your business is too dependent on you. How long can you be away from your business and still have it run smoothly?
What if you get sick or you have a parent who suddenly needs constant care and you’re the one to provide it?
There are many action steps that you as a business owner can take to help the business run more independently. Freeing yourself from the “day-to-day” actually creates more value in your business, because it can still operate without you there; something a buyer or successor would need assurance of. Unfortunately, many owners feel isolated and alone in running their businesses. One way to remedy that is by learning to delegate to your leadership team. Hopefully, you have trustworthy people in place, who understand and align with your philosophy and values. A solid leadership team, backed by good support staff are key components of a turn-key operation; a necessary feature when it comes time to exit.