Challenge your old beliefs about how your
business should work. It is never too
early to shape or too late to re-shape your business. It doesn't matter if your business is 20
years old, 2 years old, 2 months old or on the drawing board, start shaping the
company to run without your being woven into the very fabric of the
business. Design it to run without your
supplying all the effort and energy. You
cannot control everything, you cannot control everyone. Let go!
Start behaving like a strategic business owner.
You do not want to create merely a job for
yourself. The ultimate goal of creating
a business is to sell it one day, at the highest premium possible, to your
employees, family members, or an outside buyer.
You deserve an acceptable return on your investment of time, talent, and
treasure.
No matter what size, age or industry, every
business should be prepared to be sold.
Yours is no different. This
“start with the end in mind” strategy should help focus you on building an
effective business model that doesn’t have you at the center of its universe,
relying on your presence, personality and perspiration for its success. Again, you should not be the business and the
business should not be you. This
work-in-reverse approach not only maximizes your selling price, but also
minimizes your hassles and headaches while you own and run the business.
As stated earlier, your goal is to design or
re-design your business to work without you.
Your business model should be sculpted in such a way that it can be
easily replicated dozens of times in cities around the country or world,
requiring only your vision, not your physical presence and exertion. Whether you ever expand or not, such an
ambition should help you focus on building a systems-dependent (not
owner-dependent or people-dependent) business that generates repeatable
performance and consistent results. You
must help others get results. Without
other people, you don’t run a business -- you work a job.
What is an effective business system? It is simply an integrated web of separate
processes, procedures and policies. A
business system allows you to get consistent results through other people –
tremendous leverage and freedom! The
business system is your documented instruction manual for “this is what and how
we do it” at our company. Some typical
operating processes are as follows:
·
Selling
·
Marketing
·
Manufacturing
·
Inventory management
·
Order processing/customer fulfillment
·
Customer service
·
Billing and accounts receivable
·
Procurement/accounts payable
·
Facilities management
·
Accounting/finance
·
Human resources (i.e. hiring, firing, reviewing,
promoting, paying, etc.)
·
Information systems
·
Store opening and closing procedures
Your business with such processes fully
identified and explained will allow your employees to deliver amazing
consistency. Employee discretion is
minimized. Such a system will also free
you from having to touch every transaction, make every decision, answer every
question and solve every problem. You
can manage by exception! Such a carefully
crafted enterprise will also give you breathing space to think and act like a
strategic business owner as well as the time to do personal activities that
matter most to you.
Without such a business system in place, no
one will want to pay a premium for your broken business. They would not want to buy a dysfunctional
business that is solely dependent upon you for its day-to-day operations and
survival. If it were obvious that you
are a prisoner to your business, why would anyone want to buy into such a life
sentence? They would not or would pay
very little for such a systems-deficient business. Please grasp this; no one wants to buy a job,
a series of headaches, or an owner-centered and owner-dependent business.
To maximize your company’s eventual selling
price, realize that buyers want to acquire a smoothly running, money-generating
machine. Buyers want to purchase a
business system that runs on near autopilot, foolproof status. They want to buy a fully documented,
organized business system that gets predictable results. They want an asset that has proven processes,
predictable revenue streams, and strong growth potential. They want to buy a well-designed,
hassle-free, cash flowing asset, not a “pain in the ass”.
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