I had a conversation with a gentleman recently about selling his business. His feelings were hurt when I told him I did not think he “owned a business” that had any value worth selling. My point is that lots of folks think they own a business when, in fact, they have just created a job for themselves. When you create a job for yourself, you are self employed and being self employed is a very different thing from owning a business.
The way I am going to define owning a business is by contrasting it with the idea of being self employed. A self-employed person is a person with a trade that is essential to the everyday operation of that business. If the “owner” goes away for a week or two, the entity has trouble functioning. This self-employed person has in fact created a job for themself and if they don’t “work it,” they don’t get paid. Tradesmen like plumbers, carpenters, and electricians operate in this fashion. So do many professionals. If a lawyer’s practice is all about his or her individual prowess and ability, it stands to reason what that person has built is impossible to sell, because he or she is not for sale. On the other hand, a business owner owns an entity that that functions with or without his or her daily input and presence. These businesses are able to function in this manner because the owner has built systems and procedures, manuals, training programs, and policies that guide the business in its daily function and operation.
There are many examples of this in your daily life. Every franchise system has all of these qualities. The owner of a Starbucks or McDonald’s does not have to make coffee or flip burgers. In a “business,” the owner moves to a position of strategic guide and typically does not do daily operations.
So ask yourself which model best describes your business. If you have a dream of someday retiring and selling what you now own, you must move towards the business model. In essence you must replace yourself with trained people and defined systems, so that the new owner can step in and become the new strategic planner and not have to “flip burgers.”
The next obvious question is, “How in the world do I get there from here?” The answer is pretty simple, but not very easy. The core of most franchise models is standardized processes and procedures. Most small, self-employed models don’t have manuals for training and daily operations. The owner personally trains incoming employees or his/her manager does the job. The basic problem here is that if you don’t train from a standard set of procedures, each employee gets trained based on what you now know, how you feel that day, your mood, and many other factors that you may not be aware of.
A similar disconnect will occur if your manager is doing the training; he/she is training based on what they understood you to say, what they have learned, and how they think it should be done. There is no way that they remember exactly how you taught them to do it. They also have their own style and technique. So you must create standard training by writing down your most common and critical procedures in your business.
Define how you do each procedure in a step-by-step process. You may say, “But I don’t have time to do that.” One option is to hand the initial process off to your best person on that procedure and require them to write it out; you then review, correct, and oversee the process. This empowers your employees and holds them accountable to work within established guidelines. By involving your employees in the process of writing the manuals and procedures for your business, you will gain their buy-in and make them feel valued.
This is how the process of business ownership begins. You must position yourself to work on your business and not in your business. Take a good look at your business and ask yourself if you could sell it to someone today who did not have all of your expertise, could the new owner run what you have built? More simply put, do you have a defined way of doing business that they could continue profitably?
Lastly, let me recommend a couple of books that will help with the process. E-Myth Revisited by Michael Gerber and Cash Flow Quadrant by Robert Kiyosaki. These are great basic books on how to go through the process of getting to business ownership. Good luck!