If you’re like most owners, you started your business, or took over the family business to follow a passion and to have freedom:
Navigating the emotional odyssey of building a business is directly linked to how well you manage growth and cultivate healthy business operations. What often happens is the desire for freedom leads owners to aspire for a bigger business, which they think will give them what they want. Unfortunately, most owners who strive for more revenue or profit as their primary goal inadvertently fuel the emotional rollercoaster and have:
So, in many ways, growing a larger business gets you further from your ultimate goal of freedom.
Instead of thinking of your business as something to push harder and faster, there’s an alternative that may get you closer to what you want. Think of your business as a child, and your role is to guide him into becoming an independent, thriving adult.
When your goal is to create a business that can thrive without you, you will start to make different decisions. That demanding customer who wants your attention on their project no longer looks so attractive. That exciting new product that’s going to require you to sell no longer looks worth it.
By putting yourself into the mindset of a parent raising an independent child rather than the sole business driver, the demands on your time for the day-to-day minutia lessen.
As you establish a plan with priority initiatives, goals, and objectives, and you are clear about expectations, your employees pick up more of the load and you pick up more time to work on the business instead of in the business.
You may also find you’re landing more sales as you build a team of salespeople rather than relying only on yourself to drive the top line. The ultimate irony is that your business may end up being more valuable than a larger peer where the owner is still mostly responsible for sales.
Acquirers want businesses that will survive the loss of their owner. In many cases, they will pay a premium for companies where the owner is in the background. Consider the case of Damian James, who sold his network of mobile podiatry clinics generating $11 million in revenue for $13.2 million. He credits much of the sale to the fact that he was no longer running the business day to day and had reduced his time commitment to just one or two days per week.
David Hauser started Grasshopper, an Internet-based phone system he built to $30 million in annual revenue before he sold it to Citrix for $165 million in cash and $8.6 million in stock. Hauser was down to working just one day per week at the time of the sale of his company.
Growing revenue and profits will be valuable to an acquirer, but if you make them your only goal, you may find yourself with less of what you want. Treat your business like a child who needs guidance to become a thriving adult, and revenue, profits, and ultimate value will come as a by-product.
Need help establishing your plans for the next year? Reach out and schedule a discovery call, and let’s get you on the right track.
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