If you are a business owner, you may oversee every part of the company. However, it’s important to remember that a prospective buyer won’t be interested in a business that needs you to make it run successfully. While you might not be thinking about selling your business right now, it’s a good idea to take the time to prepare for the future. The following tips can help to reduce owner dependence so that your business can run independently when if you decide to one day sell.
1. Build a Competent Management Team
You may be the only one who knows the steps that made your business the success it is today. It’s a great accomplishment, but your business needs to run trouble-free even when you are not able to be there. That’s where a management team comes in to play. A management team is a group who can make important decisions and delegate tasks when you are not available.
When setting up your management team, choose members who are passionate and have an interest in learning how to move forward. Current employees are likely to be the right group for the job, as these employees may already have a good understanding of how your business works. The upside of a management team is they will show prospective buyers that yours is a business with a strong foundation.
2. Delegate Tasks and Decisions
It’s not enough to hire a team — you need them to take care of important tasks without your assistance. A management team works together by compounding upon each other’s strengths. You chose your team for a reason. As they become a part of the company, delegate important jobs and decisions to your workers. If you have problems with delegation, take some time off. Taking afternoons away from work will allow your team to solve problems without you. Bonus: when you aren’t always there to answer questions, your team’s confidence will grow.
3. Plan with Your Retirement in Mind
We know your business is important to you, and you may not necessary to be in a rush to leave it just yet. However, you should prepare for the day you will be ready to retire. After you have set a competent management team in place and delegated important tasks, you can continue to build upon that strong foundation by taking extended vacations to allow the company to perform without you. Remember: a business that is accustomed to running without your presence has more value to a future potential buyer.
4. Document Important Information
You know all of the secrets that make your business work successfully. However, you need to be able to prove them to others. Document how the following activities are achieved.
- How are sales obtained?
- How is work conducted?
- How is billing handled?
- How are hiring and firing handled?
It is also vital to have official policies and procedures that are actually used within the company. Paperwork and red tape are a drag to perform, but it will help you show the strengths of your business. Careful documentation of your process is evidence to a prospective buyer that they will be able to run the business as well.
If you follow these tips, you will be well on the way to eliminating owner dependence when it comes to running your company. Your company will become stronger with these newly implemented techniques, setting you up today for a brighter and more financially solvent future.