As I was surfing around looking at business news, I came across an article on selling a business in the Pittsburgh Tribune Review here that I found rather interesting reading for business owners. The headline reads “Selling a business often ends up with the doors closing for good”
This article is very typical of many small businesses. The business growth, emotions, choices made, actions taken, and end result. Many believe that the amount of blood, sweat, and tears put in to build up a business is actually building up equity. In fact, all they have is a very low paying J-O-B and all those years of slaving away at the business were for naught.
Most small businesses are headed for the same demise in the future. Their business will either be at any of these stages:
- Be grossly underperforming and therefore not very profitable…
- Be hard to manage without the key personnel like the business owner around and therefore be overly-dependent on the entrepreneur, creating a job (that no sane person would ever want) instead of a business…
- A business that enslaves the entrepreneur and eventually robs him of all motivation and drive to continue running it…
Here are five things you need to know so you can avoid this same fate from a business coach who speaks from the heart…
First, understand that you are in control of your business. It’s not the fault of your competitor, the economy, the high gas prices, or the recession that your business is underperforming. If you can truly grasp this, you will be far-far ahead of anyone in your industry. Sure, these factors do play a role. You should also know that you have the ability to make choices which can bring in more business. Realistically speaking, in most small businesses, sales and profits only need to be marginally better to beat their current performance levels. If you take the baby steps to improve the sales and profitability through smart business marketing, you’ll gain a greater level of freedom and feel more in control over your business growth. Most small businesses simply don’t market their business properly and therefore never really see the potential profits they are missing out on. This is where having a business coach is very helpful. A business coach will guide you in developing customized marketing programs for your business based on your budget and industry.
Second, be willing to delegate tasks. Empower people in your business to be take on more responsibility. Know the difference between delegating and abdication. If you end up doing all the work, then it’s not an attractive position for anyone in the family to take over nor is it for anyone considering buying your business. For specific guidance on this task, consult my team building program.
Third, you must systemize the business. Develop business processes that will make it easier for anyone in the business to manage the day-to-day operations. If you leave the business up to people to run, chances are results will be unpredictable and will depend on the person’s ability to oversee tasks. Be dependent on the system to lead your team members in their day-to-day tasks. Think about how McDonald’s franchises operate. They are system-dependent and not people-dependent. A system-dependent business is far easier to sell and hand over to family members than one that is people dependent or where highly specialized skills are involved.
Draw up detailed organizational charts with specific responsibilities for each team member so there’s no confusion who does what task.
Fourth, you must have a plan to free yourself from day-to-day operations and only manage critical areas like measuring of key-performance-indicators, marketing, sales, business process management and other areas of business development. Understand that a business is not a JOB. It is a business and as the business owner, you have very different responsibilities – ones which no one can do for you.
A great book to read on this phenomenon so many business owners face is the ‘E-Myth Revisited’ by Michael Gerber available here. I highly recommend this book for all small business owners and it’s the first book I recommend all my business coaching clients.
[dels]business performance management, kpi key performance indicators, small business growth, business process improvement[/dels]