Despite the fact that Michael Gerber wrote the “E-Myth” some 25 years ago, many business owners today still don’t know the difference between working “IN” their business and working “ON” their business.
What’s so important about this distinction? If you are a cog in your company’s wheel, you don’t spend the time piloting the company. You can’t see what it needs in terms of strategic changes like improving processes, performance or productivity enhancements. These are the changes that make a company saleable. You own a lifestyle business (an un-saleable company), not a wealth generating business (a saleable company).
You can’t grow (scale) a lifestyle business without getting out of the day to day functional roles.
So the bad news for you is, it is hard to grow, when no one is steering the ship. Running the company means spending time on strategic organizational processes and growth opportunities. Not doing functional or technical work. And it is impossible to shift your company from being a lifestyle business that gives you a pay check (hopefully) and some dividends (did you plan for that last year?) and transform it into a company you could get a return on.
If you want more than those two income streams to populate your “next act” or “freedom55” account, you need a wealth generating company. You need to focus on transforming your lifestyle business into a saleable enterprise.
Here are some elements of what makes a wealth-generating business different from a lifestyle business. A saleable company has a management team in place. It might have a general manager or a senior leader who is not planning on leaving the business any time soon.
To move from leading a lifestyle company where you are the leader and one of the functional managers, you have to replace yourself, your knowledge has to be passed on and your managers need to take over your key relationships.
It is hard to hand yourself the pink slip unless you’ve done some serious reflection on what kind of return you want from your business, the legacy you want to leave, and where else you want to apply your creative talents.
There will be no big payday without you being very intentional in your strategic plans. It’s time for you to decide you want a saleable company.
A saleable company is:
- Easy to run, because you are not running it anymore, you have professional managers in place.
- More profitable, because you now have the time to think and implement strategic plans, aim at goals, fix profit and productivity leaks and set a firm organizational foundation and market-based reason for growth.
- More fun to be in because a saleable company is going places. Everyone can feel the momentum.
Are you ready to give yourself the pink slip?