When you first take the leap into entrepreneurship you’re usually not thinking about building a sellable business. That initial push often revolves around a more fundamental desire that most of us share: being your own boss. Rather than work for someone else, we decide to swap reliable paychecks and good health insurance for the freedom and control associated with self-employment. We’ve all done it — some of us more than once.
Then one day you look up and realize that things have changed. Suddenly you have employees to deal with, cash flow to manage, terms to negotiate. The days are long and seem to keep getting longer. Just when you think you’ve gotten caught up, the conveyor belt speeds up again. You can never seem to get on top of it all. What happened?!
What’s happened is that somewhere along the line your job turned into an actual business. Rather than evolve as your business has grown, however, you’ve resisted promoting yourself to CEO and kept the “this is my job” mentality you started with. Regardless of why, you’ve invested a lot of time and money into your business. Maybe it’s time to ask yourself if you want to keep investing in a job or start building a sellable business.
Here are eight ways to tell whether you’re building a sellable business or still stuck in job mode:
- A job requires that you show up at work to make money, whereas a sellable business generates revenue whether you are there or not.
- If your company is so reliant on a single customer that they can dictate how you deliver your product or service, your company is more like a job than a sellable business.
- A job is a place where your personal reputation impacts your results, whereas a sellable business is a place where the brand is more important than the personality of the founder(s).
- A job requires you to use your personal experience and expertise to get a result, whereas a sellable business is a place where a process – not a person – consistently produces a desirable result.
- In a job, you get fired for taking too much vacation. If you own a sellable business, the more vacation you can take without impacting your company’s performance, the more valuable your business will be.
- In a job, the harder you work, the more money you earn. In a sellable business, the smarter you work, the more money you earn.
- In a job, you solve the problems. If you own a sellable business, your employees solve the problems.
- If the majority of your customers know your mobile phone number, it’s likely you have a job, not a sellable business.
So how do you graduate from CC&BW (Chief Cook and Bottle Washer) to CEO at your company? Here are a few things to work on:
- Make yourself operationally irrelevant. Measure your progress by the length of vacation you can take, with four weeks being the goal. Also,
- Start building a solid layer of management between yourself and frontline employees. Profitability may dip in the short-term, but it’s worth the investment in capable managers to grow your business today and ensure that you can sell it when you’re ready to move on.
- Join a peer support group, like Vistage. You’ll be surrounded by other business owners who are either experiencing the same growing pains, or have been there/done that. Either way, you don’t need to reinvent the wheel or go it alone. What you do need is a support system to help you make changes at your business and keep you accountable.
- Ask yourself a difficult question: Does the business revolve around you because it has to, or because you want it to? If too much of your ego and identity are wrapped up in your business, you may have become a hindrance rather than a help. Start focusing on life outside of your business, and lay the groundwork for what you will do after you sell it.
- Build recurring revenue streams into your business model. The less you have to worry about beating the bushes to drum up every new sale, the more you can focus on higher level strategy and long-term planning at your business.
If you’d like to get more enjoyment out of your business today — and be able to sell it in the future — you’re going to have to leave job-mode behind and start acting like a CEO. It’s time to step away from the shop floor, the loading dock and the assembly line and take your seat in the corner office.
Congratulations! You’ve graduated from self-employment to small-business ownership. Remember: No one wants to buy your job, but they might pay big bucks to buy your business.
Want to know what your business is worth? Ask us about our affordable business valuation.