Can your business operate without you?
Let me ask you a question:
Do you have a business, or do you have a job?
Think about that carefully because if your business flounders in your absence, or if you only make money when you’re working, then you have a job, my friend. And there’s nothing wrong with having a job, but if you hope to sell your business one day (or leave it to family members), you’re going to have to turn your job into a business that can operate successfully without you.
Imagine doing a fire drill on your business
What emergency plans do you have in place?
- Who can run your business when you’re sick or on vacation?
- Consider the 5D’s: Death, Disability, Divorce, Distress, and Disagreement - these are real work possibilities.
- Do you have business partners or irreplaceable employees who must be there for the business to function? Do you have a business plan?
Get over yourself – this is about building a system
No one likes to think they’re replaceable, which may be why so many business owners don’t bother to think about how their business can operate without them or the key players they’ve partnered with or hired. But we want your business to thrive no matter what happens, so that everyone involved is protected. I’m sure you’d like more vacation time this year—and if you’ve got your eye on retirement, you need to put systems and protocols in place that ensure your business will continue to be successful in your absence.
Once you’ve had a business valuation, completed your exit readiness survey and collected all of your important paperwork (like a data room) you are then ready to tackle your contingency plan. Next, sit down with your exit planning specialist and determine the specific needs required for your business. These include:
- Detailed job descriptions and manuals for each management & staff position
- In-depth manuals for client relationship management and client information databases
- Specific instruction manuals for every piece of computer equipment, machinery and software program
- Complete handbook for emergency protocol
- Meticulous descriptions of opening & closing procedures
- Thorough instructions for supply and vendor management
Notice how I used words like: ‘detailed’, ‘complete’, and ‘thorough’ with the above needs. Vague directions won’t cut it. Could a new hire read your directions and competently operate an essential piece of equipment? You won’t always be there to train and provide support. Hopefully you’ll soon be retired, relaxing on a beach, and employee training will be someone else's responsibility. Let’s make sure you provide clear direction so your business is sustainable without you.
Basically, we must take all of the crucial operational information about your business that exists in your head (and the heads of your partners & staff) and put it in organized documents to be kept on file and updated regularly.
The reason why franchise business models are so appealing to buyers is not only that they are proven moneymakers; but also the buyer knows they will get a very thorough set of instructions and templates to follow. They can replicate what other franchise owners have accomplished and have similar success. You need to provide the same kind of blueprints for your potential buyers to ensure they see your business as a sure bet, rather than a risky venture.