This week, I’m talking with a couple of business owners who’ve been running their companies for multiple decades. They’re now considering selling their businesses, and it got me thinking about a crucial aspect of business success: owner involvement.
Although I’m framing a lot of the content I produce in terms of selling your business there are other reasons you should work to extract yourself from the day to day.
First, when you follow the process I lay out below you will free up more time that will help you focus on growth and on the bigger picture of the organization as a whole.
Second, when you are important to the day to day what happens if you get hit by a bus 🚌?
No, seriously, think about the ramifications to your family, your employees, and the health of the business if something unforeseen should take you out of the business. Would it keep going?
Third, don’t you like vacations? 🏖️
But the list goes on.
Owner involvement can significantly impact the multiples you get when selling your business. If your business relies on you, your private and intimate knowledge of the business and your daily involvement, or your personal relationships to keep running then its time to take a close look at what you mean to your business.
Most buyers in the value range that I serve are financial buyers looking for a business that they can grow and operate from above. What they’re not looking for is a job.
Don’t get me wrong, buyers don’t expect to buy a business and do no work, but most are willing to pay a premium for a business that “runs itself” and will seek a discount for your involvement.
You want a premium right?
A good friend of mine has a very successful low-eight-figure revenue business he’s been running with a partner for almost 20 years. Because of the way they originally built their billing system every day, he would wake up and push a button to bill all his customers.
If he didn’t get up and push the button nobody got billed.
Maybe that’s a silly example but its true. And the point is to ask yourself the question. What buttons am I pushing?
When I first decided that I’d get my business ready to sell, even though I was out of the everyday stuff, there were still a surprising number of tasks and projects that I found myself involved in.
Here’s the playbook I used to optimize my business for sale: it starts with tracking your time 🕒.
For one month, monitor everything you do in your business. Each week review what you did and ask yourself these three questions about each task:
- Can it be eliminated?
💥 You might be surprised to find that some tasks are no longer necessary or have no impact on your bottom line. I found this to be especially true in marketing – a big story for another email.
- Can it be automated?
🤖 Identify any tasks that can be streamlined with software or other automation solutions, like my friend’s button-pushing story, freeing up your valuable time but also making your business less fragile.
- Can it be delegated?
🤲 Figure out which tasks can be handed off to others in your organization, and focus on the things only you can do as the owner. This is a massive topic and I’m going to go much deeper on it in the future.
Taking these steps will help you create more value in your business by making it run more autonomously, increasing the chances of getting a higher multiple when it’s time to sell.
Next week, I’ll dive into some of the mechanics and how to make it a game changer for your business.
So, start tracking your activity int he business so you can have an honest look at your role, and let me know how it goes! You might be amazed at the potential you can unlock in your business.
If you’ve got any questions I’d love to hear them, make sure you’re subscribed to my email list, find any email and click “reply”.
There are lots of time trackers out there but it doesn’t have to be complicated. Below is one I built in Notion, my favorite productivity and documentation tool that I’ll refer to quite a bit. What’s awesome about it (a whole lot of things) is that its mobile as well so it works wherever you do. You can copy it and use it on their free version 👇🏼.
Finally, Here’s a link to the time tracker template.
Notion Time Tracker