Introducing: The Value Builder Series
Helping business owners build valuable businesses
Through our Business Value Builder Programme we work with clients to build long-term value in their business. We help them by critically analysing their business to identify and leverage the key value drivers specific to them. This is the first of a series of articles by Crowe partner Gerard O’Reilly that deal with a range of topics and challenges that owner-managed businesses face.
Feeling trapped in your business?
Escape the owners’ trap
There is a time in every business where the owner needs to be on top of everything, whether this is during the start-up phase, during periods of high growth or when a drastic adjustment was needed. This is normal and even necessary. But it should not be forever.
The cliché is well known – your job as the business owner is to work on your business not in your business.
If you are continually performing day-to-day functions in your business, then you are not doing your real job. Your real job is to continually develop and improve your business. You need to understand how your market is evolving, and how you need to adapt to suit these changes. This involves ensuring you have time away from the day-to-day by ensuring those tasks are appropriately delegated.
Feeling trapped can be that sensation that your business needs your daily input to keep going. Are you doing most of the sales? Do you control the key relationships? Are you making all the day-to-day decisions?
You might think you cannot afford to be away from the coalface and you may be correct. But ask yourself, do you have a job or a business?
To cap it all, this feeling of being trapped is doing real damage to your business value. Why would someone buy your business if a key part of what makes the business a success is going to exit after the sale?
So how do you change? As Richard Branson says, his job is to make himself redundant. With the right team and systems in place then you should be able to exit from the day-to-day.
Like all change it should be done gradually. Equally you need a plan – begin with the end in mind.
Firstly, identify those items that take up most of your time but are not critical for you to do and pass them on. From payroll to purchasing and other day-to-day activities – identify those people in the business who can rise to the challenge and take on the additional responsibility. This will free up time to consider how you build your business.
Secondly, look at those other tasks that you undertake where you are more critical to business success, say key relationships or product knowledge, and see how you can progressively shift those responsibilities to others
Thirdly, fix in on your future plan. A starting point to developing the plan should be understanding what would attract a likely buyer. Ask yourself when you look at the market which business you admire and would be interested in buying and why. Now ask yourself what you need to change to make your business more valuable. A guiding principle is that your business should be measured against the four attributes – DRST
Defendable, Repeatable, Scalable and Teachable (to employees)
The more your business conforms to the above value drivers, the less you should be needed in the day-to-day and free from the dreaded owners’ trap. You are well on the way to creating a business of true value.
Crowe partner Gerard O’Reilly manages our Business Value Builder Programme, a practical and effective programme for company owners to build lasting value in their business. Contact Gerry if you would like to find out how he can help you achieve your personal and business goals.
Read other articles in our Value Builder series:
Seven ways to create harmony in a family business