When beginning a business, always start with the end in mind. Eventually, you will one day want to sell your business … that’s how substantial wealth is created. Also, there is usually a time when the original founder needs to step aside and let the business evolve and grow to a much higher level. Therefore, even if you have owned a business for years, you should gradually be getting it ready to be sold and to survive and function without you. It is never too soon or too late to position your business to be sold.
Like we stress to each client at The Growth Coach, a North American business coaching franchise system, in order to eventually sell your company for a fortune, your ultimate goal is to one day become the least important person to the day-to-day operations of the business. Yes, please read that again. While that sounds illogical, it makes perfect sense if you think about it. As owner, you cannot afford to be at the center of every problem, every decision, every mess, and every transaction. If so, you will hold back the growth and development of the business and your employees. While you should always be the owner and leader, you should not be the Chief Doer.
Your business, long term, cannot depend upon your presence, personality, problem solving or perspiration for its daily survival. If so, your business does not work for you … you work for your business. You’ll always remain a glorified employee and prisoner to your business. Instead, you need to create an independent, self-sustaining, cash-flowing machine. Instead of having the business be dependent on you, have the business be dependent on the operations manual, systems, processes, and people you have put in place.
When you can say you are no longer the most important person to the daily operations of the business, it will be a joy to own/manage and you could also sell it for a substantial amount. Since your business is where you’ll create your real wealth, you need to position yourself to generate as much equity in it as possible. Here is your wake-up call … a company is never worth its full value to a buyer if you (the current owner) have to come along with it to make it run. No one wants to buy your JOB or a broken business … or, if they do, they will pay VERY LITTLE for it.
From day one, or as soon as you can, structure and operate your business so that you are NOT the most important person to its daily operations.
- Do not be hands-on with every job function or a technical specialist.
- Do not be a control freak or the Chief Everything Officer.
- Do not be responsible for or visit every box in your organization chart on a daily basis.
- Do not let the business depend on you for everything.
Instead, as the owner, you should be a generalist and a leader. Provide the vision, leadership, business systems, and the passion, but not the blood, sweat and toil on a daily basis. Instead of working so much “in” the business, work “on” the business. Build the systems and document the work to be done by others. Your job is to create jobs for others, not create and work multiple jobs yourself.
With the proper end game in mind, you will do the right daily actions to create a customer-serving, money-making asset that is separate from you. Think and act like a CEO, not a typical small business owner.
Growing a successful business is like raising and loving your child to eventually be independent and self-sufficient apart from you. Same thing with your business. Give it the proper foundation and wings to fly on its own … you will enjoy the business while you own it and you will be richly blessed when you sell it. Let your business grow up strong, self-sufficient, and independent … become the least important person to the daily operations.
Want to jump start thinking and acting like a CEO? Request a FREE copy of our book, “Becoming a Strategic Business Owner”.