If someone else can’t run your business, then how will you ever take a vacation? When you are looking to sell your business or find an investor, people interested will be looking to see how well the business will run after the current management is long gone. They are looking for the staying power of the business. How well is it managed and if the resources in place for it to continue to make a profit and pay out a dividend. Or at least increase it’s market cap value.
Businesses that a fool can run.
Management should always be focused I’m building a business that can scale. This means the business can grow profitably. In order for the business to grow profitably it will need to have many people involved. These people will replace the jobs originally done by the founder or the founding management. At scale. This means the organization will go from one member doing everything to a small team, to eventually a large organization with different functions teams such as an accounting department, a marketing department, a finance department, a sales department, etc. It is the founders job to make sure that these separate work areas are communicated effectively to the original management team. And it is that’s management teams duty to effectively communicate the job functions to the new departments as the company grows.
Business planning will help a company sustainably grow it’s business. If the company is a start-up, a solid business plan should delineate a business model. The business model is simply a repeatable set of steps that leads to the sale of a product or service. As the business model is proven, via execution, the business plan will show how to scale the business model. A working live business plan for internal purposes helps teams grow and execute their business models. This entails daily revisions of the business plan and business model based on data the company has obtained through executing their business plan.
Regardless of the details, make sure you build your business so that a monkey can do the work. This will allow a founder or executive to be able to work on the business instead of work in the business. This will allow for growth. It will allow the business to operate for hundreds of years regardless of who is in charge of the day-to-day management.
Running a business is not easy, it’s the job of the current management to make it easier for the next management team. If you cannot step away from your business, if someone else can not run your business for you, you will never be able to reap the rewards of owning a business that pays you. Instead you will be a Slave to the business.