Picture this. You are relaxing on a beach in a deck chair tapping and swiping your tablet to check the latest results from your business, knowing you can confidently manage your business remotely.
The reality is it is possible. But it’s not that common as only a small percentage of business owners truly make it to the point of being able to detach themselves from the daily operation of their business. However, you can be one of the ones that do!
Before we explain how, it’s helpful to explain the three key transitions a business owner may move through to reach that enviable position.
Let’s categorise business owners into three categories, as a:
3. Managing Director/Entrepreneur
A worker is a business owner but typically spends their time heavily involved in delivering the outcomes that a client pays for. In this way they are less distinguishable from any other employee. The common phrase ‘working on the tools’ portrays the picture well. They may be forced to try and manage the business as well, but that often becomes a chore and something they struggle with.
The main characteristic to point out is the business largely exists on the singular passion, energy and hard work of the ‘worker’ business owner, as they pursue something they love to do and are good at.
They are the business and the business is them. One could argue it’s simply a job under another name. The type of business structure is typically a sole trader or micro business with a couple of employees.
A manager is a business owner that has moved from the worker stage to employing people to assist and hence has more time to work ‘on the business’ following the E-Myth principles.
The challenge is that the owner finds it hard to cope with all the responsibilities because:
- Inability to let go of the work they like to do, working ‘on the tools’.
- Failure to delegate trust and responsibilities to other employees.
- The time and effort required managing staff.
- Acquiring the skills to plan, grow and take the business to the next level.
- Dealing the complexity of compliance and corporate governance.
The difficulty is that there is no school (that I know of) where an emerging business owner can learn all the practical skills required. We need a license to drive a car, but there is no “owner license” required to run a business.
The school of hard knocks, common sense and experience, is definitely of some help but more is required. Short courses at colleges and elsewhere supplemented by business coaching can help but they too have their limitations as they can often be too general to be of real help and/or are transient in nature such that lessons are not embedded.
In the above Manager scenario the owner may have made a good start on things like documenting policies, procedures and systems in the business. That is vital to be able to move the business to the third and ultimate stage of being a business that has the capacity to run on ‘remote control’.
This is the hallmark of a highly desirable and attractive business, and is an essential point to reach if you wish to sell the business.
At this level, what do you think the MD/Entrepreneur should have in place to confidently assess the management and ongoing success of their business via remote access on their chosen digital device?
What do you need to be able to run your business whilst relaxing by the pool?
From our experience working with business owners at various stages of development we have identified the building blocks required:
- Clear vision and plans that both motivate and guide the owners and the team.
- Products & Services that attract premium returns and margins.
- Building of the profitability and cash flow sufficient to attract and pay for quality people.
- Experienced, trusted and incentivised management team.
- Motivated, trusted and engaged workforce with a culture that supports it.
- New Job Descriptions & KPIs for the owner as MD that is adhered to (rather than having the owner unaccountable).
- Bullet proof documented standards, procedures and systems including the Perfect Year Business System.
- Optimised use of technology.
- Minimise or eliminate single personal dependency.
- Creation of business tools, templates and performance management dashboards.
- Establishing the business as an influencer in its field via profile and brand awareness.
- Implementation of self-managed performance systems supplemented by Board of Management structure
Much of the above will be familiar to an experienced business owner. But how do you get there? How do you implement in such a way that the changes are permanently embedded in your business?
This is where the ‘rubber hits the road’. Correct implementation is critical. That’s why Pathfinder Advisors specialises in the implementation and embedding processes. Our goal is to help clients gain real traction and meet their goals.
Of course, you can always attempt the development of the strategy and implementation processes on your own. But wouldn’t it be helpful to have someone focus on that for you?