You started your business for the freedom that comes with running your own company. The freedom to earn what you deserve, and to work for whoever you want, when you want, and from wherever you want.
The challenge for many business owners is that the dream remains elusive.
Even more importantly, a business that can’t thrive without its owner is a worthless business.
To be valuable to an acquirer, your business must be able to succeed and grow without you.
Four Common Signs That You’re In The Owner’s Trap
1- You find yourself in every decision because you’re the subject matter expert and Chief Problem Solver.
It’s a “hub and spoke” challenge when your team continually comes back to you for input or decisions. Take a hard look. What are the capabilities of your team? Do you have an experience gap or is something else standing in the way? Do you really need to be involved in all of the decisions?
Write down all of the things that you would like to start, stop, or continue doing personally. Look for opportunities to delegate, automate or eliminate. For delegation, consider documenting core processes that employees can follow to provide guidelines when you’re not around. Can repetitive tasks in your organization can be automated or eliminated?
Consider a 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. Soon employees will be able to solve their own problems.
2- You’re often asked by customers to sell other things than you originally envisioned when you started your company.
Instead of cross selling lots of different products and services, the most valuable companies do the opposite. They focus on selling just a few things to lots of customers. The least valuable companies sell lots of things to a few customers. It means you’ve got too much customer concentration and you’re probably bumping up against the ceiling of control but beyond which you can’t grow your company.
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.
3- You can’t take time off from work.
What is your ability to separate work from your personal life? Do you often miss out on time to recharge, self-care, and time with loved ones? Employees can’t deliver upon the commitments you’ve made, and customers are increasingly dependent upon you. What would be the first thing to break down if you were away? Knowing the answer will help you establish a plan. You can put processes and systems in place to minimize the possibility of a business disruption. This will help you find ways to reduce your involvement in those areas.
4- You’re the company’s best salesperson.
If so, you’ll need to fire yourself as your company’s rainmaker. While it’s good to have strong relationships with your customers, what would happen if you found yourself unable to lead sales initiatives? Formalize the sales process so that others can be involved. Assess the skills of your employees to determine if you need to look outside for talent, or if you can groom someone already on your team.
Benefits of Escaping the Owner’s Trap
Escaping the owner’s trap has significant benefits. It will allow you to create a company and have a life. Your business will be free to scale up because it is no longer dependent on you, and you will no longer be a bottleneck. More importantly, your company will be worth a lot more to a buyer whenever you are ready to sell.
Having a more attractive company helps you create more options for the future of your business. This gives you the freedom and power to secure its future. You’ll have more options of selling, scaling, or passing on to the next generation of leaders.
How We Help
With our Value Builder Engagements, we work with business owners on a monthly basis to address owner’s trap challenges and improve the value of the company. To get started, complete the Value Builder Questionnaire. We’ll benchmark your company versus industry peers, identify strengths, and risks that can affect your value.
If you are ready to learn more about creating greater outcomes for your business, let’s talk. We help business owners in the Greater Pittsburgh Area and throughout the Mid-West and Mid-Atlantic Regions. Schedule a free confidential conversation today.