Business owners breaking free!
A business owner’s independence from their business can also be viewed as freedom.
It’s freedom of money, it’s freedom of time and it’s freedom from stress.
But the reality is that most business owners don’t ever reach a point where they are completely relaxed about money, or that they have complete control of their own time. Some are potentially even addicted to a little stress.
Money, time and stress for business owners
Many business owners will feel stressed about certain things, often on an ongoing basis and some will feel extremely stressed, almost non-stop as their business is so dependent on them to be profitable. That isn’t to say the business is not successful, it could in fact be quite profitable, but if it is still totally or significantly reliant upon the business owner for ongoing functionality, it has a risk. This risk is what devalues the company in the eyes of any would be investor.
The problem is that should the business owner step out for any substantial period of time, then if something breaks it doesn’t get fixed, and if something fails then any dependency doesn’t get completed. It’s not only important that there is business owner independence, but also business independence from it’s owner.
These are things that are reliant upon that business owner that nobody else can do or it’s either skill set or authority level. It can either be functional and profitable or it can be problematic, but either way it can’t be done without the business owner’s involvement…and that means the business has to make demands of the owners.
This is an incredibly common state for businesses to reach and plateau at.
For the owner it can be stressful, and can prevent them from doing other activities (leisure or other business pursuits). It can also mean the business isn’t as valuable as it ought to be (both in terms of profit for the owner and in the marketplace should they wish to sell).
This is why working towards business owner independence is essential, and there are a range of ways a coach can help the all important shift happen.
What stops a business owner's independence?
One of the key reasons why many businesses stay dependent on their owners is that the owner (sometimes even subconsciously) wants it that way.
Quite rightly, many business owners are hugely passionate about their company. They love being part of it. It’s what gives them an adrenaline rush in the morning and makes them get up and enjoy going to work, and they fear that stopping.
If the business becomes less dependent on the owner, their own sense of personal value can be diminished. “I’m not needed any more – and that’s surprisingly scary!”
But at some point, there is always a shift in priorities, and sometimes that happens quickly by necessity which doesn’t give the owner time to wean the business and themselves off of one another.
It could be a desire to work less and see the dividends of their hard work and business ownership come to fruition, or to pursue other business interests, or something more personal such as a family member needing to be cared for/unwell. Especially in the latter scenario, there is a conflict of interest between needing to work and needing to be at home.
This brings us back to the original point, in that achieving owner independence is moew about achieving a different freedom to what they think – the freedom to choose. If the business is dependent on the owner, there is no choice on involvement. If the business is independent, the owner can still choose to be involved, but their absence would not significantly harm the company.
Value of the company to others
If a business is effectively the business owner – they are the ones who have the relationship with the customers, they are the only ones who understand and know the operational processes, only they have access to certain software, systems and machinery etc – this means there is not really a ‘business’ for others to invest in or buy. This is quite often a blind spot for business owners, and needs to be diplomatically handled.
To achieve business owner independence, there needs to be a plan ahead.
This is not about whether an owner wants to retire, but whether they want freedom.
Do they want freedom of choice to do the things you want to do or to handle the problems in their life should they come about?
In most cases the answer is yes if we ask the question this way.
Wise words from a business coach...
To achieve independence, there needs to be a plan of what the future of the business looks like. A future organisational structure (as discussed in a previous article) allows an owner to look at the business operations in terms of roles, not individual people. Many people can wear many different hats, which is fine, but the organisational structure needs to reflect on the roles and jobs to be done, not the people.
By doing this, it’s possible to see just how and where the business is dependent on any individual, not just the owner perhaps. Here is how you do it:
Draw out the organisational chart by role, and then tagging all of the roles that the owner is involved in, and all of those that are either totally reliant or have a task within there that is reliant upon them as the business owner. Then you can set a plan for reducing the degree of reliance by:
- Developing the team’s skills
- Building up the team as a whole to overtake those issues
- Hiring / training a secondary person that can become cross-skilled
- Hiring / training a secondary authority on those issues
- Documenting processes and systems to allow others to do them.
Alongside the organisational chart, it’s also recommended to create a systems map, whereby you identify the process stages, create the procedures and how to guides, create checklists and provide tools and reminders.
This means that no function of the business remains totally reliant upon the owner, or indeed anyone else in the business who is the sole individual who knows how to do a particular task. This is a good thing to do for any business, as it reduces the business risk at employee changeover times, as well as if anyone becomes unwell or leaves.
These simple steps will enable owners to step out, should they wish to at any point, and know that those things will still get done, and done well enough.
These are the secrets to business owner independence.