How to remove yourself from the day-to-day running of your business (and why you need to)Nov 20, 2020
If you’re like most entrepreneurs, you’ve built a business that would collapse without you at the helm.
Every key decision goes through you – and plenty that aren’t so important as well, if you’re being honest.
You’re the face of the business and main point of contact for your key clients.
Plus, you’re the person your staff turn to whenever they have a problem, no matter how big or small.
Of course, it’s your business, so why wouldn’t you be at the center of everything?
But if you want to build a business you can sell at a premium, you need to remove yourself from your company’s day-to-day operations.
Here’s why this is so crucial – and exactly how to do it.
Why you need to remove yourself from your business’s day-to-day operations
It might seem counterintuitive that you shouldn’t be the one pulling all the strings in your own business.
You know your industry and your products or services inside out, you’re the one with relationships with your key customers, and your staff’s loyalty might rely on their relationship with you (especially if you’ve hired family and friends).
What’s more, you’ve got where you are today through your passion for your business and the way you’ve led your team to successfully filling a gap in the market.
And make no mistake – people love to follow passionate entrepreneurs who put in long hours every day, and that’s no doubt had a part to play in your success so far.
But remaining at the center of your business causes a whole host of growth barriers and some big roadblocks between you and a fair price when you decide to exit your business.
How to know if your business relies on you too much
If any of these problems sound familiar then you’re almost certainly too involved in the day-to-day running of your business:
- There’s never enough time in the day.
- You're constantly tired and stressed.
- You feel like you’re carrying the weight of your employees’ happiness and livelihoods on your shoulders.
- Customers are starting to complain about substandard service because you’re too busy to look after them properly (but you don't have a member of staff you trust to step in).
- You spend all of your time in the weeds, making it impossible to step back and take a strategic view of things.
- Your business doesn’t have proper systems and procedures in place (they're all in your head), which means it’s becoming more and more inefficient as it grows.
What a buyer sees when they look at an owner-dependant business
Any investor thinking about buying your business will see owner-dependency as a huge red flag.
Their first thoughts are likely to be:
- When I acquire the business will the customers follow, or are they too tied up with the current owner?
- Will the staff be loyal to me or be eyeing the door when the current owner is no longer in the picture?
- Do staff members hold the key knowledge of the business, or just the owner?
- Do staff members understand the systems, processes and all the other idiosyncrasies, or just the owner?
With these unanswered questions in mind, a buyer is going to look to reduce the risk associated with the investment.
And unfortunately for you, that might mean:
- Reducing the purchase price to reflect the risk associated with owner-dependence (I've seen significant amounts knocked off the purchase price of otherwise strong businesses).
- Paying a smaller amount of the purchase price upfront, with the rest paid later based on performance.
- Requiring you to keep working in the business as an employee or consultant for a long period of time.
- Imposing a painful restraint of trade.
- Ensuring systematic changes are made at your cost before the sale.
How to remove yourself from the day-to-day running of you business
So as you can see, you need to extract yourself from the day-to-day operations of your business if you want to exit big.
Luckily, there are five simple – although not necessarily easy – steps to removing yourself from the daily operations of your business and transforming it into a valuable asset.
1. Learn to let go
There’s a whole host of reasons you might have for staying tied up in your business’s daily operations:
- ‘Things would fall apart without me at the helm’.
- ‘I’m the one with the relationship with that client’.
- ‘No one would be able to do that as well as me'.
And some of these might have some truth to them.
But they’re all problems that could be quickly solved by putting the right processes in place (more on that in a bit).
If you’re like most entrepreneurs, there’s really only one unanswered question that’s holding you back from putting these processes in place and stepping back from your business:
‘Who am I if I’m not in charge of this business?’.
Being the person pulling all the strings in your company has become part of your identity over the years.
And if you give that up, who are you?
And what do you do with your life?
Unfortunately, there’s no easy answer to these questions.
It’s going to take a bit of soul searching to get past this mental barrier that’s holding you back from maximising the value of your business – one it’s essential you break through if you’re hoping to sell your business for a healthy profit.
Luckily, you’re far from the first person to go through this thorny issue, and there’s plenty of support out there to help you navigate these choppy waters.
Working with a business coach or joining a CEO group will give you an outlet to discuss this problem openly and confidentially with peers.
This can be a powerful way to get objective feedback on issues such as your inability to delegate and how to groom and develop your senior management team.
You might even want to speak to a therapist in order to work through how you’re going to fill the void once you’ve handed over the keys to your castle to your team.
Whatever you do, don’t underestimate just how important learning to let go is to this process.
The rest is simple compared to separating your identity from the business you’ve spent so long building.
2. Give more responsibility to your staff
There’s only one way to be less integral within your business – give more responsibility to your staff.
Once you’ve learned to accept the loss of control that comes with stepping away from the day-to-day operations, this is simply a matter of executing the five ways to get your business to run without you.
Once you’ve done this, you’ll have a motivated and empowered team ready and waiting to take over your business’s day-to-day operations.
3. Start building a leadership team
At this point you’ve got a team that can run the day-to-day of your business autonomously.
But you’re still tied up in the strategic decisions.
A big step in the right direction, but still a red flag to a potential buyer that's going to affect what your business is worth.
So, once you’ve got solid processes in place, it’s time to turn your focus on building a leadership team to start taking ownership of the key decisions in your business.
Nurturing talent from within and looking outside of your business are both great ways of building an effective team to take over – just as long as you’re confident you can entrust who you choose with your business’s success.
Once you’re confident you’ve got a leadership team capable of growing your business on your behalf, you can seriously begin the process of extracting yourself from its daily operations.
4. Transition key clients to the sales team
It’s common for owners to be the face of their business, and therefore the key point of contact for the biggest clients.
And in my experience, this can become one of the biggest challenges when you come to step back from the day-to-day.
You’re left asking yourself if your clients are going to stick around if you’re not the face of the business any more.
And if that’s a question on the back of your mind, you can be sure it’s one a potential buyer is asking as well.
Which means you’re not going to get the best price for your business.
The solution is simple, although pretty nerve-wracking in practice: you’ve got to transition your key clients to your sales team.
This doesn’t have to be done overnight – it’s a delicate transition that it’s well worth taking the time to get right.
But it’s something you need to do if you want to execute a successful business exit.
5. Start stepping away
Once you’ve passed day-to-day responsibilities over to your staff, the key decisions to your leadership team, and all client relationships to your sales team, you’ll have successfully extracted yourself from your business.
Now it’s times to prove that to yourself – and potential buyers.
Like each step in this process, you don’t have to rip the band-aid off all at once.
Start with not checking your emails after 5pm. Then stepping away – completely – for a long weekend. Then a week.
Ultimately, your end goal here is to get your staff used to the fact you’re no longer running things.
Which is going to be quite a transition for them if they’re used to you being at the heart of every decision.
So, set expectations up front: that they shouldn’t come to you with day-to-day issues anymore, pointing them in the direction of who’s going to handle those issues from now on instead.
Follow this up by being far less present in the office.
This will hammer the point home to your team that you’re no longer the person to go to with quandaries and queries.
And it will also make it clear to investors that your business isn’t owner-dependant.
Reaping the rewards
There’s no sugarcoating it – going from pulling all the strings in your business to stepping back completely is tough.
I certainly struggled through it myself. But in the end, it was one of the nine changes that increased the value of my business the most
Getting the right processes in place is a challenge that involves plenty of trial and error.
But more than that, it’s a huge roadblock for most entrepreneurs to let go of the business they’ve built.
Along the way, keep your eyes on the prize: a huge payout when you come to sell.
And don’t forget – by going through this process, you’ll become the owner of a business that runs without your hands on the wheel.
Which puts you in a great position going forward should you choose to sell or not.
Removing yourself from the day-to-day operations of your business is a key part of any successful exit strategy.
Luckily, it’s a simple – though not always easy – process to transform your business from owner-reliant to running without you.
There’s never been a better time to turn your business into a valuable asset, and the steps I’ve outlined in this guide will help you do exactly that.