A recent survey by The Sellability Score found that companies that demonstrate that they would perform well without their owner for a period of three months or more are 50 percent more likely to get an offer to be acquired when compared to more owner-dependent businesses. How does your company run in your absence? Have you compared your company’s performance when you are present to when you are absent for short periods or for long?
When you are ready to sell your company, to cash in your hard-earned equity, how can you improve your chances of getting top dollar? How much is your company worth now? Can you do things that will add incremental value for you? Do you know what those things are and how to do them?
Next time you are away, make note of the things that either fall through the cracks or that “the office” contacts you to resolve. If you are really bold, see what happens when you tell your team to deal with the issues. Do they get resourceful and solve the problems that they “delegate up” to you? If so, what changes do you need to make to get your team handling more of those things, even when you are present? What changes do you need to make to keep things from falling through the cracks?
When you return, from either a few days or a week or longer away, what issues are in your inbox that need your personal attention? Rather than taking what often seems like the easy path of busily finding answers to each problem in a frenzied attempt to clean up your inbox, make the time to review each issue to see if you have a possible problem with your people, systems, or authorizations. Have you created systems, processes, and structures that effectively make you the bottleneck? Have you created an organization that cannot function without you?
Start with your people and answer the following questions:
- Why did this problem end up on my desk? Why did the problem not route to somebody else in my absence?
- Who else is qualified to answer this question and why was that person not consulted? Why do they not routinely handle this?
- If nobody else is qualified, who can be trained to answer this question in the future? If the answer is nobody on my team can be trained to do this, what does that mean for the sustainability of your organization? What would a prospective purchaser want to know, or to be concerned about, if this is a critical component to your business?
Next, look at your systems, processes, and procedures.
- Could the issue have been dealt with if you had a system or a set of rules in place? The best systems are hardwired and do not require human interpretation; but if you’re not able to lock down a technical fix, then at least give employees a set of rules to follow in the future.
- If this is a strictly human process, is the process documented? Do people know where the documentation is and how to follow it? Do they agree with the written version of the process or system?
- Are people trained in the necessarily procedures? When new members join the team, are they trained to follow the correct processes and procedures, or do they learn somebody else’s version, that may take undesired shortcuts?
Do you have to approve every expenditure, schedule, and procedure? Do the members of your team believe that nobody else has authority in your organization? If so, you may be your company’s bottleneck? Does everything run through you? Does it seem like it to you, or to the members of your team? Are you trying to control spending too much? If the members of your team knew how to address the issues that arose in your absence, would they believe or know that they had the authority to act, including paying the costs of the fixes?
For example, you could put a customer service rule in place that gives your front line staff the authority to make a customer happy in any way they see fit provided it could be done for under $100.
You might allow an employee to spend a specific amount with a specific supplier each month without coming to you first. Or you might give an employee an annual budget, an amount they can spend without seeking your approval.
Given the fires that may need to be extinguished after the fact, taking a holiday may seem more of a hassle than it’s worth. But if you transform the aftermath of a vacation, or a business trip, into systems and training that allow employees to act on their own, you’ll find the time away pays significant dividends by helping your company increase in value as it becomes less dependent on you personally.
What should you or can you do today to improve the value of your business?