So you ask yourself, how can I avoid my business depending too much on me? How can I avoid the owner’s trap? First, let’s consider what you are trying to get from your business.
A common theme amongst entrepreneurs is the concept of freedom. This could be financial freedom, freedom over our time, or even freedom of the mind [having clear headspace to make decisions].
In many respects, this is what real wealth is all about. Aligning these three freedoms to be able to do what you want, when you want.
Your business is a means of providing you with this freedom. Having a ‘sellable’ business, that is less reliant on you, is the ultimate way of achieving this freedom in your life. Not because you want to sell your business today, but because once your business is set up to be sold you have a number of choices that can deliver real freedom:
- Scale the business up because it isn’t dependent on you
- Get out of the day to day operations by hiring a full-time manager or CEO
- Pass the business down to family or a management team
- Sell your business
Having a sellable business means you are holding all the cards and can make decisions freely without duress. Unfortunately, many owners are running businesses that are not sellable because they are stuck in the ‘Owner’s Trap’.
Do any of these sound familiar:
- Does business slow when you are away? [or you never get away]
- Do customers come to you when something goes wrong?
- Has your revenue flatlined and growth is a challenge?
These are all indicators that you may be caught in the Owner’s Trap. Basically, you feel stuck in the business and whatever you do, nothing really changes. This impacts the operation and the value of your business suffers.
signs you’re in the Owner’s Trap
This is more common than you think. It begs the question of how did this occur in a business you have worked so hard to develop?
The reality is it happens over time. Owners are usually the industry subject matter expert in their business and become the centre of all activity. Employees generally do not have the same deep level of expertise as the owner and when they are challenged, customers insist on speaking with the owner.
With only 24 hours in the day and one owner, the problem compounds creating bottlenecks in the business. The business gets stuck. Development stalls. Revenue stagnates. All of these factors detract from the owner’s enjoyment of running their business and overall quality of life.
In addition, this over-reliance on the owner negatively impacts on the value and attractiveness of the business. Buyers looking to enter the industry will not pay for a business that limits their ability to enjoy their own entrepreneurial freedom.
recognition is the first step to freedom
The good news is that having recognised the problem makes it possible to escape the Owner’s Trap by analysing your business and identifying those areas that you can remove yourself from. Then prioritise the opportunities from easy to complex. A starting point may be as simple as introducing key customers to a senior team member and establishing a new relationship.
It will take time and a leap of faith on your part, however, the benefits can include improved business performance, a more engaged team and ultimately less reliance on you. In addition, these changes will make your business more valuable and more attractive to potential buyers.
is your business stuck?
If you would like to learn more about escaping the Owner’s Trap, enjoying your entrepreneurial freedom and building a business that is less reliant on you feel free to contact our business advisory and business broking, send us an email at email@example.com or give us a call on 1300BDEPOT.