Many overlook the differentiating factor between most truly successful businesses and others: the business owner is separated from the business, leaving it flexible for whatever may come in the future.
Owning a business means taking into account all potential options for the future (looking long term); not necessarily those that come to mind now (beware immediate gratification).
It means overcoming the scarcity mindset of playing small, and thinking big. Will your business end with you?
I participated in a leadership conference for business owners recently wherein one of the speakers, Craig Groeschel, explained through various case studies the hallmark of successful businesses (defined as businesses that are able to expand, grow, and ultimately succeed). The key? “Bend the curve”; meaning, find the point in your day to day business tasks where you reach a point of diminishing returns. For example, does it take you 8 hours to get a speech 90% prepared for presentation? If you then spend 10 hours on the same task, do you then get the speech 95% of the way prepared? Take it one step further- if you spend 15 hours on preparing that speech, how much more progress are you able to make on the same task? Likely, 90%. Over complicating, wasting time on one project within your business will likely not only get you nowhere; it will get you to a point of diminishing returns- meaning, the extra hours you spent on that task were not only a waste; they kept you from other work. A successful business owner not only recognizes this point, but learns how to “bend the curve” at that point of efficiency to grow upward, rather than remaining stagnant.
A debate this summer with some business owners recently opened up a division in many entrepreneurs’ thinking: you can sell a business, sure. But you can’t sell a service-based business, where you’re the primary service provider (so says them).
They’re wrong. Here’s the truth: Every business should be built in a way that it could be sold in the future (that doesn’t mean every business should be sold- that’s too much of an absolute). But true leaders recognize that their businesses shouldn’t be forced to end with them. Ironically enough, the conversation in question was with a photographer. My first question- if you think you’re the only one who can do your job, how are you able to hire second shooters? Photo editors?
You are NOT the only person who can do your job. Yes, you may be the only person who can be the “face” of your business, and yes there may be exceptions to who can perform the client work (my industry being the perfect example), you are not the only person who can handle client requests and demands as they arise.
The real question is two fold: are there kinds of businesses that can’t, or should be positioned for sale?
You won’t be able to identify that “bend in the curve” if you are handcuffed to the day to day tasks of your business. You didn’t start a business to become a business. Not only that, but when you are stuck in that position, you’re cutting down your own freedom…and your own ability to maximize your potential when opportunities pop up in the future.
There are two ways this concept most often arises with my clientele- one more pleasant than the other, yet both can derail a business if mishandled. Here are two examples:
Theoretical: You don’t know what will happen in the future.
I refuse to run my client relationships from a place of fear; however, I would be reticent to act as if we could control everything, all of the time. No one has control of the future; my own life experiences have taught me this more than anything.
There have been two times in my own where I have suddenly had to rush to opposite ends of the country for medical treatment, completely uprooting my life from my work and business obligations. In those instances, I simply had no choice but to create “space” in my business; “space”, meaning hires could step in and help carry the load, and the actual future of my business had to be closely examined (more on this later). Which leads me to:
Realistic/likely: Your business will grow. How is it positioned to handle that growth?
What I mean by this: your business is going to grow, which means at some point, you will likely want to delegate, outsource, or hire various elements of your business, and if you have not taken the time to record your processes, etc, you hamstring your ability to seamlessly bring on team members.
Again, speaking from my own personal experience- this is not something that most business owners typically automatically know, but something along the way something will take this from a theory to a reality for you. For myself, rushing off to one of the top medical facilities in the world-with no set return date- illuminated the need to have someone on hand to man the helm faster than any advice I’d ever received, blog post I’d ever read, etc. I needed to make sure my business was still operational.
EVEN IF YOUR BUSINESS IS SERVICE-BASED?
Back to the original question: yes, every business can be sold. But why should business owners even consider that route, even if they know without a shadow of a doubt they;ll never want that?
Because honestly, business is not a selfish endeavor. Not just in the sense of how it effects other people through its goods or services (outward facing), but how it can effect people behind the scenes, when the unexpected occurs. One of my hardest client stories demonstrated this point in a way I will never forget.
The client had built a service-based business from the ground up. It was his family’s sole source of income, and was wildly successful. The family had an extremely comfortable life, and all was well-until it wasn’t. A rare and aggressive cancer changed absolutely everything for his family when it took his life in a matter of months.
To make matters worse, nothing was put in place to help create a line of succession for his business. This business; his legacy, his source of income and more, could have been saved, or at least sold for profit to help his family, relatively easily (from a legal perspective). However, it simply hadn’t been taken into account that cancer would show up in his late 40’s (is it ever?), and that didn’t happen.
Of course, that is the most extreme of examples, but please use that as a lesson.
Never assume that your business won’t expand in the future. You may be a photographer, who also has a marketing business. Who’s to say those two sides of your business won’t grow exponentially over the years, to the point where you would want to sell one side, or the other?
Your business is about more than just you. As the leader at the helm, it is your responsibility to consider outcomes. Don’t shut the door on avenues that could remain open. Don’t limit your mindset around your business- you never know just what you can do with the business you have today.