A recent survey by The Value Builder Score found companies that would perform well without their owner being present for a period of three months are 50 percent more likely to get an offer to be acquired when compared to more owner-dependent businesses. The better your company is able to run without you, the more valuable it will be when you’re ready to sell.
A good method for determining your company’s ability to handle your absence is to simply take a vacation. There is no better justification for a blissful, uninterrupted holiday than assessing how your company performs in your absence. When you take your vacation, leave your computer at home and switch off your mobile. When you return, you’ll probably discover that your employees were resourceful and found answers to many questions they would have asked you if you had been just down the hall. That’s a good thing, and a sign you can confidently start planning an even longer vacation.
You’ll also likely come back to an inbox full of issues that need your personal attention. Instead of immediately finding solutions for each problem in a frenzied attempt to clean up your inbox, use this as an opportunity. Slow down and look at each issue with the goal of identifying problems with your people, systems or authorizations. Then, ask yourself a few simple questions about each one of those three categories. Answering those same questions will help you build a plan to make your business more attractive to potential buyers.
Start with questions about your people.Why did this problem end up on your desk, and not someone else’s desk? Who else is qualified to answer this question and why was that person not consulted? If nobody else is qualified, who can be trained to answer this question in the future?
Next, look at your systems 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. If you’re not able to lock down a technical fix, then at least provide employees a set of rules to follow in the future.
You may be a bottleneck in your own company if you’re trying to control spending too much. Employees may know what to do but lack the means of paying for the fix they know you would want.
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 provide an employee with a pre-approved monthly spending limit for a specific supplier. Or you might give an employee an annual budget for discretionary spending: money they can spend without seeking your approval.
Taking a holiday often seems to be more of a hassle than it’s worth, given the fires that may need to be extinguished when you return. But if you transform the aftermath of a vacation into systems and training that allow employees to act on their own, you’ll find the vacation is worth what you paid for it many times over: your company will increase in value as it becomes less dependent on you.
Do you own a business you could sell? Find out by taking the 13-minute Value Builder Score questionnaire
Credit: Foresight CFO