Most small businesses are built on the founder’s vision, enthusiasm and day-to-day involvement. That’s all well and good, but it will only take the business so far. To grow to the next level the owner will need to start delegating and build a team to help his or her run the business. Sadly, many small businesses fail to make that transition.
It all starts with the owner taking a step back and carving some time out of their day to work ON the business rather than IN it. What is the end goal? Unless they plan to work indefinitely, they will want to retire one day and pass the business on to the next generation or sell it to new owners. The snag is that, at the moment, they ARE the business, which is going to make it difficult to sell it.
To help you understand the process we highly recommend the book “The E-Myth Revisited” by Michael E Gerber. In it Gerber walks you through the steps in the life of a business—from entrepreneurial infancy through adolescent growing pains to the mature entrepreneurial perspective—and shows how to apply the lessons of franchising to any business, whether or not it is a franchise. By franchise the book means a business that runs without any input from the owner – which is exactly what is required here to enhance the value of your business.
The key steps in this process are:
- Decentralise decision-making – let go of routine management tasks
- Articulate – have a clearly documented plan for the business, including an organisation chart with clear lines of authority that leave only really major business decisions to the owner
- Delegate – recruit the best people you can afford and build a team, and resist “upward delegation” of tasks back to you at all costs
- Empower – give managers the tools AND authority to do the job
With a clear strategy and a plan (which may well take a few years to complete), the business will be well on its way to becoming a viable entity separate from the owner. So if you’re planning to retire or sell your business, you need to start planning well in advance (and keep those plans flexible).
If you’d like to talk to us about business planning and how we can help you improve your business, get in touch now.