And Get Back Your Life While Keeping Your Lifestyle
If you are reading this post, I will assume you own a business.
Or does your business own you?
Owning a company supposedly buys freedom. But that freedom is kind of an illusion when your company depends on you every single day of the week, intruding on your family life, interrupting your sleep and affecting your health, despite the fact that you love what you do.
Do you want a different future?
If you do then you have just taken the first step: realizing that you want change. The next step is to learn about your options so you can make the right kinds of changes without jeopardizing your business, your financial future and your current lifestyle.
This is a primer for how you can have your cake and eat it too. And no, this is not a Tim Ferriss 4-hour fantasy work week solution. This is a recipe for how to break free from your business owning you and your time.
Creating the plan that’s right for you is like piecing together a jigsaw puzzle… when you aren’t sure you have all the pieces in front of you.
The picture you want has to suit the life you want and the needs of the business in equal harmony. Yet every step towards a decision often puts you at odds with other realities like business partner’s views, what the business can afford, where growth will come from to afford changes, what would you do with your life if you weren’t needed every day in your business.
Rather than give up wrestling with all these catch 22s, start again and work through these challenges in this prescribed order. The logic will become obvious to you shortly.
Each step must be done in order as the answers to each close off some options and open up others. I’ll map out the steps first and then take you through an example.
STEP ONE – Select your goals
What kind of return on your investment in your business are you looking for? Your business is one of your assets including property and savings. You hope your property continues to appreciate. But you are unlikely to sell your house to live on. Your savings and investments should keep appreciating to fund your retirement. Does your financial security include being able to sell your business one day so that you capture the value you have built up? If not, then expect to close it. When you do, you will then forgo the monthly income you now receive. Is that ok or not ok?
- SELL ONE DAY Are you expecting to be able to sell this company one day to fund your future? If Yes then go to Step 2 – Set Your Time Frame. If no, go to option 2, Close One Day, of Step one below.
- CLOSE ONE DAY Is this a business you will close when you no longer want to run it anymore? If yes, and you will be able to retire with the funds you have saved or will move on to other income generating activity, then go to Step Two. If you don’t like the financial picture because closing the business stops your income, then go back and reflect on option 1, Sell One Day, again. You may want to meet with a financial advisor who can help you get on an accelerated savings strategy so you could close one day and still retire comfortably.
STEP TWO – Set your time frame
- SELL If you want to be able to sell it, then you have to invest in company growth. How? At least 2-5 years before your date, build a saleability blueprint so you can add the right economic value drivers that make it worth what you want to sell it for, when you want to sell it. Remember, buyers look when it suits their strategic agendas, not your exit date. By making your business saleable now, you are prepared to sell at anytime. You want to sell when the company is still growing. And in the meantime, the increased profitability allows you to hire people to replace you.
- CLOSE If you want to close it one day, then you need a plan for how to keep the company thriving so that you are not financing the downsizing with your personal funds. You might not want to grow it but you have to keep replacing the attrition of customers, staff and suppliers. So decide the capacity level that you are willing to work at. And remember, you did start reading this article to free up your time from running your business. So if you don’t want growth, then maybe you need to hire someone who can grow the business for you or with you. Realize you may have to take less money from the business in the meantime to afford to find and mentor your new general manager. Is that ok?
STEP THREE – Transition Plan to Work Less
1. SELL – If you want to sell at some point, and don’t want to work for the new owners, then you have to work your way out of your current job without hurting the company. You need a plan that your business can afford to either mentor several staff to take over what you do or hire a general manager or hire a specialist. Your business might need to grow a bit more to afford this. This new team is responsible to drive growth, consistent profitability and scale up people and systems. You are their new mentor transferring your knowledge, helping them to work using their strengths… and no, they won’t do it like you do it, but with your patience and investment of time, they will get the job done.
2. CLOSE – If you want to work less in the business but don’t plan on closing it for many years to come, you can also take the same route as sellers – mentor the next level in doing all that you do. Grow the business enough to afford capable people. Hire for attitude before skill. Think of these people as your apprentices. It takes time to transfer knowledge, relationships and build skills and experience. Nurturing this team is your new job description. This solution allows you to continue to take dividends from the business while your new team runs it for you.
WILL THESE OPTIONS WORK IN YOUR BUSINESS?
Regardless of which option you want in your future, selling, closing or working less now, you will need to replace you in your role at some point.
Professional Services – If you are the expert in your business, consider hiring a business professional to run your company, rather than another expert. You need someone running the show who can manage operations, people, processes and growth, not someone who understands how to do root canals, engineering, accounting, financial planning, specialty medical services or architecture.
Hire more experts as growth allows. Put strengths to work in the right roles.
This is the objection we hear most often from professional service business owners: “My clients are buying me, my skills, my reputation. I’m the brand. I can’t hire another me.”
We completely agree. There won’t be another you. But that doesn’t have to stop you from getting the future you really want, whether it’s selling, closing or working less in your business. Open your mind to the possibilities… even though it seems impossible right now. Imagining trusting someone you have selected to drive your business forward may be outside your comfort zone. Acknowledge that you have heard stories of failures doing this. You don’t think you can find anyone. You don’t want to trust people. And try on the possibility at the same time.
To drive the business forward, you will need to define and document your processes, procedures, secret sauce, and those intangibles that built your brand and then teach this framework to all your experts and your business leader. That’s your role over the next few years. Even Steve Jobs had to mentor to transfer his vision, knowledge, and brand to others in his business. It is possible. You have to want your desired end result more than your need to prove that no one else can do it just like you can.
Your business will evolve and your customers will come to love the ways your team works with them too.
You will need to analyze your business from several angles to see what roles your company can afford, what capacity you need to grow it to take in new hires, how to build in the time for creating your mentoring program and to change how you work to allow your recruits to learn while doing the work you used to do.
Products and Services – The same advice goes for owners of companies that make, resell and build solutions: To work less and still have a financially viable life, you have to grow your business to the next level to be able to afford to replace you. But let’s break that idea down more.
You probably wear many hats in your company. You lead strategy and are the rainmaker, or the product developer or the operations expediter. Let’s face it, your company depends on you to do a job. You need to lead your business, not work in it. So the first step, after you’ve determined the future you want, is to understand what your company needs from the role you are currently serving in.
Define the functional job that you do now. That is a role in your business you would hire for. You might need to hire another business development person or a technology whiz or a person who knows the ins and outs of your industry. But you don’t need a replacement for you.
Secondly, evaluate if you didn’t do this functional job, what would you be doing in your business to maintain it, grow it or stabilize it? Define that role. Now determine if you’ve got the interest, strengths, time and capacity to grow your business to the next level. Will you have more or less free time. If you wonder about whether this role is a good fit for you, then consider the idea of bringing on a leader who has experience driving growth.
BUILD YOUR PLAN
Regardless of your type of business any of these options require a written transition plan and to have explored the ramifications of each of these decision points. It can take any where from 6 months to three years to replace you in your business to reach the results you really want.
Before you start on this journey, you need to understand the risk points in your business, how your company will afford these changes, how you will deal with the changes and where the growth will come from. Often these decisions come with other impacts that close down opportunities or come at a cost. You want to be sure you are fully aware of the pros and cons of each choice.
MEDICAL: Jennie ran a busy dental practice. She used contract hygienists, a full time receptionist and had a big network of specialists. Yet she still had to manage people, administration, billing and professional development. When she created her plan, she knew she wanted to be able to sell her practice one day and not work seven days per week today. With three young kids, she knew she couldn’t keep up home, work and her commitment to her clients much longer. Something was going to bust. And she didn’t want to let down anyone.
Working with a consultant, together they determined the number of patients she had to see, the amount she wanted to work and saw that the discrepancy allowed for another full time dentist. Accounting all the time she invested in managing her operation, she also realized she’d be better off with a more capable administrative manager rather than just a receptionist. Someone who could manage daily operations and staffing. Further, the new dentist could start out as an employee. If he or she achieved the goals they would set together, then this new dentist might become the buyer of her practice. But that was a discussion that would not happen for several years.
Jennie was willing to invest in this plan. Within 8 months, she had the right people in place a growth plan with milestones set out for the new dentist to be held accountable to. Today, she works 3 days per week and has taken four holidays this past year. Her old patients love their new dentist as much as they love Jennie.
How to Get Started Breaking Free
For more case studies about how others have taken this step, book some time with us. Having worked with more than 100 businesses, we’ve probably have an example that suits your situation.
Thinking through all these options can give anyone a headache, especially if there seems to be roadblocks in the way. If you want to explore your options and then build a plan that your company can afford in accordance with what you want and your business needs, let’s talk. You can schedule a call to get started here.