A guest blog by David Croydon of Hilltop Consulting.
If you run a business (that is to say, a proper business with employees, not the lifestyle business I run), I’ll have a bet with you that virtually every problem or issue you confront comes under one or more of three simple headings:
Time; Team; Money.
And the one that is virtually all-pervasive is the first one.
You started the business with ideas that you would be able to make a better lifestyle for yourself, while also making a shed-load of money along the way.
Yet here you are 2/5/10* years in (*delete as appropriate), working 60+ hour weeks, haven’t had a holiday in ages, relationships in tatters as a result – and maybe not even the best paid person in the business. Sounds familiar? Well, as the hotel bellboy said, delivering champagne to George Best’s room, to find piles of bank notes on the bed, together with a naked Miss World and lines of cocaine on the bedside table, “Where did it all go wrong?”
There are two reasons why allowing the business to run you in this way is a bad idea:
- A life of all work and no play doesn’t just make Jack a dull boy: it risks eventually costing you your health, your marriage and your financial well-being.
- Working long hours in the business is a sign that the business is too dependent on you, and that has a directly negative effect on the value of the business, should you contemplate a trade sale.
THE ONE THING YOU CAN’T MAKE MORE OF
So what is the solution? The secret is also two-fold.
- Figure out what are the absolutely most important assets that you bring to the business – the things that generate the most revenue and profit and that no one else can really do – and concentrate on that – and the strategic growth of the business. Everything else: build a team you have trained and can trust to delegate to, with minimal supervision.
- Create written systems and processes for every part of the business – from answering the phone to chasing unpaid bills – that an idiot could operate, never mind the trained and trusted team under your control. It’s called an Operations Manual, and if comprehensive enough, should allow the business to run without you in it. In a phrase, “Systemise the everyday; personalise the exceptions.”
If you can achieve these two things, two more key benefits will magically accrue:
- You will have time to think about how you’re going to grow the business and achieve all those long-term aims and objectives you wrote into that business plan you wrote for the bank. (Perhaps you’ll be able to do some of this planning from a holiday home, from which you’ll eventually be able to run the business entirely, if you so choose).
- And your business will be worth four or five times more what it would have been, when it was totally dependent on its owner/manager.
No business plan should exist without an exit strategy for you either. I’ve only ever met one owner/manager who expected to be eventually carried out of his business in a box, so better plan it on your terms from a long way out.