5 Ways To Get Your Business To Run Without You

Have you ever considered making it your primary goal to set up your business so that it can thrive and grow without you?

A business not dependent on its owner is the ultimate asset to own. It allows you to have complete control over your time so that you can choose the projects you get involved in and the vacations you take. When it comes to exit, a business independent of its owner is worth a lot more than an owner-dependent company. 

Here are five ways to set up your business so that it can succeed without you.

1. Give Them A Stake In The Outcome

Jack Stack, the author of The Great Game of Business and A Stake In The Outcome wrote the book on creating an ownership culture inside your company: you are transparent about your financial results and you allow employees to participate in your financial success. This results in employees who act like owners when you’re not around.

2. Get Them To Walk In Your Shoes

If you’re not quite comfortable opening up the books to your employees, consider a simple management technique where you respond to every question your staff brings you with the same answer, “If you owned the company, what would you do?” By forcing your employees to walk in your shoes, you get them thinking about their question as you would and it builds the habit of starting to think like an owner. Pretty soon, employees are able to solve their own problems. 

3. Vet Your Offerings

Identify the products and services which require your personal involvement in either making, delivering or selling them. Make a list of everything you sell and score each on a scale of 0 to 10 on how easy they are to teach an employee to handle. Assign a 10 to offerings that are easy to teach employees and give a lower score to anything that requires your personal attention. Commit to stopping to sell the lowest scoring product or service on your list. Repeat this exercise every quarter. 

4. Create Automatic Customers

Are you the company’s best salesperson? If so, you’ll need to fire yourself as your company’s rainmaker in order to get it to run without you. One way to do this is to create a recurring revenue business model where customers buy from you automatically. Consider creating a service contract with your customers that offers to fulfill one of their ongoing needs on a regular basis. 

5. Write An Instruction Manual For Your Business

Finally, make sure your company comes with instructions included. Write an employee manual or what MBA-types called Standard Operating Procedures (SOPs). These are a set of rules employees can follow for repetitive tasks in your company. This will ensure employees have a rulebook they can follow when you’re not around, and, when an employee leaves, you can quickly swap them out with a replacement to take on duties of the job. 

You-proofing your business has enormous benefits. It will allow you to create a company and have a life. Your business will be free to scale up because it is no longer dependent on you, its bottleneck. Best of all, it will be worth a lot more to a buyer whenever you are ready to sell. 

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At Executive Forums Silicon Valley, selected business owners and leaders work together to gain clarity, insight and accountability to ignite their leadership engines, grow their businesses and improve their lives. If you are interested in learning more about Business Owner Advisory Boards, Entrepreneurial Operating System (EOS), Stages of Growth, Value Builder System or becoming a member at Executive Forum Silicon Valley, please contact gperkins@executiveforums.com or call 408-901-0321. For more information visit http://www.execforumssv.com/ .

Avoid the Mile-Wide Trap in Your Business COVID 19 Response

What is the difference between a mile-wide versus a mile-deep approach to building your business? And why does it matter?

As many companies’ growth has stalled due to Covid-19’s shelter-in-place, unemployment, reduced consumption, workplace protection and other changes and limitations, some are looking everywhere for new businesses, even scrambling to diversify by adding new products and services to sell.

However, before a necessary pivot, it is important to make sure that you don’t fall into the “Mile Wide Trap” as you look to diversify your business.

The Mile Wide Trap

The Mile Wide Trap first starts to ensnare you when you do an excellent job serving a small number of great customers and they ask you to handle more of their DIFFERENT TYPES of work. You keep delivering, and they keep broadening the list of products and services they want you to supply. Your company is wildly profitable serving the expanding needs of this small list of “great customers” so you keep falling deeper and deeper into what eventually becomes “the mile wide but an inch deep” trap. 

Pretty soon, you’re an inch deep and a mile wide in offerings and the only person in your company with the depth of industry experience to deliver all of the services is you. But you’re trapped because your expenses have crept up as your revenue has increased – leaving you dependent on the sales you get from a small group of demanding customers. And the chase never ends.

Another example of the Mile Wide Trap is when there is a disruption in the market, and you look to capitalize by doing something your company has not done before. This may be particularly attractive during this time of economic upheaval caused by Coronavirus.

A Mile Deep is Better Than a Mile Wide

Instead of selling more things to a few customers, first concentrate on understanding your company’s core focus – the intersection of your passion and your expertise, then sell a few things to a lot of customers. 

In order to scale up a company, employees, not owners, need to be able to execute work with quality and speed. This is much easier to accomplish repeatedly when the company operates within its core focus where everyone is already trained to do their best. 

As an extreme example, Ferrari represents a high-performance racing type automobile. Ferrari’s core focus is: “We build cars, symbols of Italian excellence the world over, and we do so to win on both road and track.” They are a mile deep in what they do – high performance Italian cars. They know that the gold is buried deep. One might think they could go wide and diversify into high performance motorcycles, snowmobiles or even airplanes, however, they stay close to their core focus and avoid the Mile Wide Trap.

When the markets seem to be in turmoil, it is easy to fall into The Mile Wide Trap that will eventually choke off your growth.   Do pivot when necessary, but more often than not, doubling down on your core focus will provide the long term, scalable growth you are looking for.

If you’re curious to benchmark your company on growth potential and the other seven factors that drive your company’s value, take 13 minutes and get your Value Builder Score here:   https://bit.ly/36nPCKn

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At Executive Forums Silicon Valley, selected business owners and leaders work together to gain clarity, insight and accountability to ignite their leadership engines, grow their businesses and improve their lives. If you are interested in learning more about Business Owner Advisory Boards, Entrepreneurial Operating System (EOS), Stages of Growth, Value Builder System or becoming a member at Executive Forum Silicon Valley, please contact gperkins@executiveforums.com or call 408-901-0321. For more information visit http://www.execforumssv.com/ .