The most valuable businesses are always transition ready. When working with closely held businesses, it is common that a business owner plays a central role in the overall functioning of a business.
Some common examples that we see:
- The business owner is the main driver of sales and new customer acquisition.
- The business owner is required to hold all other departments accountable to their responsibilities and goals to keep everyone on track.
- The business owner has a particular know-how that he/she has built over time that no other employee has yet built.
- The business owner maintains the closest proximity to all current customer relationships. They are the business and their credibility equates to the qualifications of the business.
- The business owner holds key responsibilities that he/she thinks are not yet ready to be delegated elsewhere.
To make a business more transferable, decentralizing the business owner from the operations of a business is essential. Buyers want to buy a business that is not hampered when the owner leaves. Moreover, increasing employee value, which looks at the strengths of employees, especially the management team, can drive value and increase business attractiveness to future buyers.
A Worthwhile Investment
Increasing employee value takes time. Often, a business owner has grown their expertise over decades, and instilling work ethic, expertise, and experience in that next generation of leaders does not happen overnight.
Here are some recommendations for owners to consider to decentralize the company responsibilities.
Delegate and measure: Consider what responsibilities you can take off your plate. To ensure the quality standard is there, build accountability measures to assess how the transition is going.
Define job functions: Your employees need to understand what you expect of them. What are their key job functions and what is the process required for them to be successful?
Build and strengthen your management team: Create reporting standards within these different levels of leadership in the organization. Like your other employees, managers need to have clear role responsibilities so that they can measure their own success and see how they contribute to the success of your company.
If these are areas that you’d like to consider in building your business and preparing for a future transition, please contact our team today.
