Hub and Spoke
As an Entrepreneur, there are so many things that need your attention: monitoring cash flow, hiring the right people, marketing your business and so on.
In my travels as a business coach, I have learned there are many similarities among owners and the issues they face, no matter the industry type or size of the business. I’m going to touch on a common problem among business owners, that if rectified can truly make the difference between being able to sell the asset someday or not.
John Warrillow, a popular business writer and entrepreneur, wrote a book titled Built to Sell, which tells the story about a business owner who turned his company around. He not only made his business a sellable asset (with the help of a coach) but sold it for a much higher multiple than he ever dreamed possible. John emphasizes the 8 factors that drive value in a business and this is the first of 8 articles on those factors. I’m going to start with the 8th factor, “Hub and Spoke” or how dependent is the business on the owner?
Are You Stuck in the Hub of Activity?
Ask yourself these questions and see if you’re susceptible to the “Hub and Spoke” cycle.
- How often do you take a vacation without taking calls from the office?
- Do you sign the checks?
- Do your customers/clients usually ask for you?
- Do you get copied on more than 5 emails a day?
- Are you at the hub in your business and your employees are mere spokes who can not operate independently of you?
- How emotionally attached are you to your business? Has it become your sole identity?
Your answers to these questions can determine whether your business is too dependent on you.
How long can you be away from your business and still have it run smoothly? What if you get sick or you have a parent who suddenly needs constant care and you’re the one to provide it?
There are many action steps that a business owner can take to help the business run without them. Having a company not dependent on the owner creates more value in the company.
How to Work On Your Business, Not In it
You are not alone when you feel owned by your business versus the other way around. There are ways to remedy this.
One way is by hiring or promoting someone else to be in charge on a daily basis; the go-to for bigger decisions. This would be someone you trust, who has a good amount of knowledge about your business and how you like things done.
Another way is to hire a business coach who can help you focus more on working “on” your business versus “in” your business. Many business owners find it beneficial to get an outsider’s perspective who is focused on the same goals. Business coaches help owners identify what to delegate, to keep their focus on what is most important.
A business owner who is stressed and overwhelmed will have difficulty surviving, especially when unexpected challenges arrive, which are typical for all companies. The greatest challenges for business owners are identifying how to delegate and what to delegate. Strategic delegation is the key to removing yourself from the hub of your business operations.