In an attempt to make a complex world more manageable, allow me to suggest that there are two types of business owners. The first is seeking a job for life. The second considers their business something to be built up and sold.
It might be simplistic, but in my experience most business owners can identify with one of these categories.
What both types of business have in common is that in order to achieve either objective a business owner needs to work towards a position of being the least important person in their business.
This might feel counter intuitive. After all one of the nice things about owning a business can be a sense of personal achievement, maybe even a feeling of importance.
So why is being the least important person in your business so important?
For the ‘build and sell’ business owner the reason is simply this: it is difficult to sell a business which needs you. If you are the most important person in the business, perhaps because of your knowledge or skills, then why would someone pay money to buy it from you when it will then lose that important knowledge?
The person seeking the ‘job for life’ is typically driven by a great idea, a passion, a vision, a love for what they do. Some success follows, perhaps their vision is proven correct. They take on staff, the business grows. And after a few years they have HR rules to deal with, consistency of delivery of the service to worry about, and before they know it they are running a business and not following their passion.
Employ others to perform the roles you don’t enjoy, become the least important person in your business, and once again you can spend your time doing what you enjoy.
To achieve your motivation, be it a sale or performing only the roles in the business that you love, here are a few tips:
- Understand yourself – what do you enjoy, what are you good at
- Understand your team – what can they take from you, what are their strengths
- Understand your business – what skills does the business need
A good start is to know which of the above types of business you own. To once again be simplistic, there are two types of business – one where the owners take the profit as they go (the ‘job for life’ type), and one where profit is reinvested for growth (the ‘build and sell’ type).
Interestingly, a great many businesses say they are ‘build and sell’ and reinvest the profit, but then find their business is not worth what they thought. Indeed, most business that fail to sell do so because of inflated vendor expectations. To put it another way, we business owners think our businesses are worth more than people want to pay for them.
And why? Because we don’t prepare properly.
Making yourself the least important person in your business can help avoid this. Here are some specific ideas you may wish to consider:
- Employ people brighter than you are
- Delegate, let go
- Give your staff real responsibility
- Ensure your staff have clarity, over their role, over your expectations
- Pass on your knowledge
Get a great team together, empower them, and only do the things you want to do and you’ve a much better chance of achieving what you want from your business.
If you have any examples of how business owners’ own importance has hindered a sale, please share them with us.
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