5 ways to make your business run independently of you
By ATB Financial 10 August 2022 3 min read
Some owners focus on growing their profits, while others are obsessed with sales goals. Have you considered making it your primary goal to set up your business so that it can thrive and grow without you always being involved?
A business that can run independent of its owner is the ultimate asset. It allows you complete control over your time, allowing you to choose the projects you get involved in and the time off you take.
When it comes time for you to move on, a business independent of its owner is worth a lot more than an owner-dependent company. As you build your business’s value and prepare for the future, 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
Involving your employees in the workings of your business creates a sense of ownership in your team. “When you are transparent about your financial results and you allow employees to participate in your financial success, you’ll create an ownership culture within your company,” says Amna Rana, ATB Senior Manager Business Consulting. “This results in employees who act like owners when you’re not around.”
2. Get your team to think like a business owner
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 encouraging your employees to think like a business owner, you get them thinking about their question as you would. Pretty soon, employees have built a habit of being able to solve their own problems.
Giving your employees the opportunity to shadow you in your day-to-day role is another way to integrate them into the business as a leader. Instead of telling them about the work, they’ll experience it and even test out the position with your support. Finally, providing employees with opportunities to participate in leadership training can help them feel more confident in a chief position. Setting goals at the beginning of the fiscal year and including a leadership component is a great way to start the conversation.
3. Vet your product and service offerings
Identify the products and services that require your personal involvement in either making, delivering or selling. 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.
If you aren’t looking to remove any service or product offerings, you could use a similar system to regularly evaluate your budget, suppliers, contractors or third-party services. Analyzing your budget and company expense sheet will help you determine your actual spending versus what you expected to spend, and identify areas to cut back. Make sure your suppliers are integrated into your business, working seamlessly with you from ordering to invoicing. If you contract work out regularly, create a spreadsheet of their skill sets so that employees know who to contact depending on the needs of the business.
4. Create automatic customers
Are you the company’s best salesperson? If so, you’ll need to set up systems to make sales (and the business) run without you.
One way to do this is to create a recurring revenue business model where customers buy from you automatically. You could establish a service contract with your customers that offers to fulfill one of their ongoing needs on a regular basis.
5. Write an instruction manual for your business
Finally, make sure your company comes with instructions included. Write an employee manual or 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 rulebook they can follow when you’re not around, and when an employee leaves it will be easier to integrate the new hire to take on duties of the job.
Making your business independent from you has enormous benefits. It will allow you to create a valuable company and have a life beyond your ownership. Your business will be free to scale up because it’s no longer dependent on you. Best of all, it will be worth more to a buyer whenever you’re ready to sell.