Business Freedom Makes Your Business More Valuable
Another major point in my recent talk with John Warrillow, author of Built to Sell, is not just to get your business in a condition that will make it attractive for others to buy but also to focus on ...
Another major point in my recent talk with John Warrillow, author of Built to Sell, is not just to get your business in a condition that will make it attractive for others to buy but also to focus on getting it into a condition that will make it attractive for you to keep.
Getting your business running as a profitable cash generating machine operating without you can make your business a very valuable asset for someone else, but it also gives you plenty of options for the future if you keep the business. You can have your business freedom and the time and money to enjoy it.
When your business is able to run without you, you can choose to stay active in the business if you wish, or you can move from to being the Chairman or the President or simply a member of the board.Get Off The Treadmill
Whether you choose to sell the business or keep it, at least you will be able to get off what I call the business owner's treadmill, where you might be running the business but really the business is running you. And the key word here is ‘running'. On the treadmill!
When you're running on the treadmill, you're stuck on it without really going anywhere and worse, you may not be able to go anywhere other than possibly on a brief holiday like any other employee – if you are lucky! Many business owners take fewer – and shorter – vacations than their employees.
It's not about whether your business is growing or shrinking in size or profitability. You might be expanding your business and it may appear to others like you and the business are doing well, but if all you are doing is making your treadmill bigger, then is it really worth it?
For as long as you are needed to be there working in the business, then you are on the treadmill. Building a bigger business could simply be creating a bigger treadmill for yourself unless you are actively working on the business more and in the business less.It's Not Just ‘Scale'
Sometimes it appears that finding your freedom takes the ‘scale' to get your business to a large enough size where you can afford your replacement. This is partly right, but there is more to it. From my experience and observations, it's not really about size – although of course that often helps. What it really takes is, firstly a shift in mind-set, and secondly, the development of systems and processes in your business that allow the business to work without you being part of the processes.
For your business freedom, your mission is to free yourself from working in the business at all. Now this can be great for you and it can also do great things for your business valuation.
A business requiring the owner to work in it will not be worth as much as the same business where the owner does not have to work in it. Removing yourself from the business not only gives you your business freedom, it also builds the business value!
By definition then, building your business freedom builds your business value!Your Mission: Replace Yourself
Don't keep all your expertise to yourself, and don't put yourself in a situation where no one else can do what you do.
Being indispensable in your own business is not a strength. As the business owner, you need to replace yourself. Remove yourself from every business system and process that requires you to be working IN the business. Your focus needs to be working ON the business.
If you want to sell your business for the maximum price, then get your business working well without you. You'll have far more negotiation leverage when you want to sell the business if you are sincerely willing to walk away from the negotiation and say, "Hey, my business is going really well. I'm happy to continue to run it if I don't get what I want".
Build your business to give you your business freedom. If the question is whether to sell your business or keep it, either way, you'll find the best time to sell your business is when you don't have to.
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ABOUT THE AUTHOR
Richard Keeves, a serial entrepreneur with small business ownership experience in ten different businesses in the last 30 years, has developed a new approach to helping business owners get off their treadmill to achieve and enjoy their business freedom.http://www.MyBusinessFreedom.com