Last week in Part 1 of this topic, we talked more generally about WHY making yourself replaceable as a business owner can actually increase the value of your business in the long run. If you haven’t read it yet, I suggest you read that article first before getting too far into this one [click here]. In this article, we want to focus more on the HOW.
So, how do you make yourself more replaceable as a business owner? It might be easier said than done, especially if your current involvement in the business is crucial to its success. Here are some steps you can take to make it happen:
The first step to take is to identify what your long-term goals actually are. This will determine just how much you have to be able to remove yourself over time. For example, you may be planning to sell the business and move on from it entirely. In this case, you need to have all the pieces in place so that you can achieve this without affecting the performance of the business. A new owner can come in and take the reins with as little disruption as possible.
Other goals that may be driving you include full retirement, semi-retirement (removing yourself from certain day-to-day tasks) or estate planning for your family in case something happens to you. Knowing what your new role will be can help you determine and execute a better succession plan.
Delegation can be tough for some business owners. You want things done a certain way and you end up doing it all yourself. You’ll never be able to make yourself replaceable if you cannot learn to delegate tasks and leadership responsibilities. Work to improve your training methods and communication, so that others can confidently take over your duties.
When it comes to delegating certain key tasks, you will want to break down what you do and group those duties together in common batches. You might be good at a number of different things, but not everyone else is. It may make more sense to disseminate similar tasks to a number of different people. Identify and utilize the strengths of others so that you can delegate more effectively.
Obviously, you don’t want to be wasting time at your company with multiple people doing the same work. That’s counterproductive. However, there may be some redundancies as you start delegating tasks and implementing a succession plan. It’s better to make sure all your bases are covered than to leave something important out. As time goes on, the redundancies will dissipate and you’ll be able to remove yourself with minimal disruption to productivity.
Technology can be a huge advantage for you in this endeavor to make yourself more replaceable. Cloud-based systems, streamlined CRM software and digital communication platforms make it easier than ever for everyone to be on the same page at all times. Use the technology and set up systems that will keep your business running efficiently whether you are there every day or not. Prospective business buyers will also see more value in a system that is easy to understand and scalable in nature.
If you plan to sell your business, retire from everyday activities or cut back on mundane business tasks, these steps will help you build a better succession plan and be able to remove yourself from the business as smoothly as possible when the time comes to move on.
Having a business advisor and financial planner you can trust will also make a significant difference as you develop your estate plan, refine your business plan, prepare to sell your business and/or retire as a business owner. For all your business planning needs as an entrepreneur, contact Illumination Wealth today. We’ll be happy to set up a free 30-minute consultation with you, so you can learn more about our services and start planning for a brighter future ahead.