What are you worth to your business?
As business owners, the mantra that you should work ‘on’ your business rather than ‘in’ the business is drilled into you from the first time you speak to a business coach to the last. As the years go on, the message is repeated over and over again to the point that it can become an empty and pointless statement. Endless verbal repetition of the goal does not make it any easier to achieve.
The reality is that the dreams of freedom, being your own boss, and building a business that supports your lifestyle ambitions are usually subdued and then drowned in a sea of ‘doing’. The need to run the business on a budget, the fear of letting others take on some of the tasks at hand, and the distractions of busyness are just some of the factors which tie business owners to their desks or the workshop. Working ‘in’ the business is a hard trap to escape for most people – so they rarely have time to get ‘on’ top of the more important things.
The end of ‘in’ is rarely where you wanted to go
The honest truth and you know me by now – I’ll always speak the truth – is that you will never get out of a business if you are always working in it. Any business, where the owner only focuses on doing the work, at the expense of running their business, will eventually go one of two ways: It will fold because it is out of control and has no one looking after its commercial and business direction; or, it’s owner will be stuck there forever…
To get ‘out’ one day you need to focus ‘on’ today
It is not just a case of the business direction, efficiency, profitability and the ability to find and satisfy the needs of your customers at stake. These are essential factors in the day to day running of the business and can only be attended to by an owner who is not too busy. The other aspect to consider is the owner’s exit plan.
A business that is dependant on the owner being present is not going to attract a premium price from a prospective buyer. Why would anyone want to invest in a company where the customers are there because they have built up good relationships with the previous owner? What would be the value of a business if over 50% of the work is done by a highly skilled owner who is soon to be leaving? How much damage is likely to be done to a business when the single most important employee takes all of their experience, backstory, market contacts and reputation and other critical knowledge into retirement with them?
The only way to get the maximum value for the business that you have given the greater part of your working life to build is to make yourself redundant first.
Planning your exit is a critical step
If you would like some help to start working on your business today – please get in touch. Whether you are swamped and can’t seem to escape the day-to-day work, or you are considering an exit in the next one, two or five years – we have experts who can advise and help.