How to scale up your business to work without you

At ActionCOACH our definition of a successful business is a "Commercial Profitable Enterprise that Works without the Business Owner".  If it doesn't, the business is broken.  You don't own a business you own a "JOB".

Getting the business working harder so you don't have to is one way to create a more valuable and sellable business.   One strategy to do this is by training others in your area of expertise. This strategy is simple, so why is it so difficult to execute?  

It can be tough to grow a service business. Clients are typically buying your expertise, and if all you have to sell is time, the size of your business will always be limited by the number of hours in your day.  We have to forget our business is not about us, but what solutions we can provide our customers.

One way to scale up your service business is to launch a training division to teach others what you know.  That's what John Taylor did when he found himself run ragged trying to grow Nova Data Testing, a Jacksonville FL based non-destructive testing company.

John found that since he was the only one in his company that had some high level certifications, he was the only one that could do those jobs.  Since he was in the field with his guys most of the time, it left little time or energy left for growing the business.  He still loved the business but hated the constant demands on her time and energy.

In an effort to pull himself out of individual projects, we worked together to first document systems of what each team member is responsible for when out on a job.  Next, we worked on building his team around his company’s 10 Points of Culture.  

Once we got the right guys on the team, he began to train them to take over and lead the jobs that didn’t need his level of certifications.  Also during this time, he began to train his key team players to get the higher level certifications that only he had.  He would go as far taking them to a hotel 2 days before the exam to just get away and cram with them for the exam.

Due in part of his focus on training his team in the areas that only he had expertise, this August he was able to take the whole month of August off to go back packing in the mountains out west.  

Increase the value of your company by training others in your area of expertise.

It can be tough to grow a service business. Clients are typically buying your expertise, and if all you have to sell is time, the size of your business will always be limited by the number of hours in your day.

One way to scale up your service business is to launch a training division or just schedule set times to teach others what you know. That's what John Taylor did when he found himself run ragged trying to grow Nova Data Testing, a Jacksonville based non-destructive testing firm.

As business owners, we all know we should be documenting our systems for others to follow, but somehow writing our owner's manual or training our team for certifications always takes a backseat to serving the next customer or fighting the next fire.

Maybe what we need to do is stop thinking of writing down our process as an internal chore and instead focus on launching a training division. That way, the job of documenting our system goes from a textbook-boring task to the raw material needed to get your business working harder so you don't have to.

 Check out our upcoming events at www.bizsuccessevents.com 

In creating a more valuable business, it is always the little things that get the big results. Our Business Health Check will give you invaluable insights into the many areas of your business that if tweaked will increase the value of your business.

By completing the Business Health Check, you will receive a Free Report based on your answers, prepared by our team of highly skilled Business Coaches.
CLICK HERE to take your Business Health Check Now

Steve Goranson has owned and operated the Northeast Florida of ActionCOACH since 2014.  ActionCOACH is the World's #1 Coaching franchise with of 1000 offices in 50 different countries. They coach over 15,000 business each week.
Steve's commitment is to assist small business owners, to spend less time working "in" their business and more time working "on" their business so they can build a more valuable and sellable business. In the end, you’ll be spending less total time working, will be making more money and will have truly created the company and team you always dreamed of. In addition we will help you put the FUN back in your business and your life.

6 Ways to Profit from Your Vacation this Summer

Summer is here, and although it may seem strange, now may be the perfect time to increase the value of your

company.

The most valuable businesses are the ones that can survive without their owner. A buyer will pay a premium for a company that runs on autopilot and levy a steep discount for a business that is dependent on its owner.

This summer, consider taking an extended break from your business to see how things will run when you’re not in the building.  It’s likely that some things will go wrong, but use those errors as the raw material for making your business operate more independently of you – and therefore more valuable. 

Here is a 6-Step plan for profiting from your vacation time this summer:

Step 1: Schedule your vacation plus one day

Whatever day you plan to start working again after your holiday, tell your staff you’ll be back one day later. That way, you’ll have a full day of uninterrupted time to dedicate to understanding what went wrong in your absence.

Step 2: Bucket the mistakes

When you return, make a summary of the things that went wrong and categorize them into one of three buckets

 Mistakes: errors where there is a right and wrong answer;
Bottlenecks: projects that had difficulties because you weren’t there to provide your feedback;
Stalled Projects: initiatives that went nowhere while you were gone because you’re the person leading them.

Step 3: Correct the mistakes

The first and easiest place to start is to simply correct the mistakes that were made. Usually mistakes are due to a lack of training rather than outright negligence. The right answer may be crystal clear in your head but not immediately obvious to your staff. Write up some instructions for next time the employees face the same situation. Make sure your instructions are clear, and share them with your team so everyone has them (a file sharing service like Google Drive or DropBox can be a helpful repository for your instructions).

Step 4: Unblock your bottlenecks

If you’re being asked for your personal input on projects, there’s probably going to be a bottleneck if you’re not around. Make sure your staff is clear on the projects where you need to have a say and the projects where you don’t. Some employees may wrongly think that you need to approve all decisions. Make it clear when you want them to act alone and when you still need to have a say.

Step 5:  Re-assign stalled projects

The hardest part of making your business less dependent on you is dealing with projects that get stalled when you’re away. Start by asking yourself if you’re the right person to lead the project in the first place. As the owner of your business, projects often fall in your lap by default, rather than because you’re the best person to lead them. Categorize your stalled projects into two groups: a) strategic projects you need to lead; and b) non-strategic projects you are leading by default. Hang on to the strategic projects, but delegate the non-strategic projects to someone on your team who is better suited to drive them forward.

Step 6: Give every employee a blank check

At Ritz Carlton Hotels, they give every employee discretion to spend – without approval from their general manager – up to $2,000 on a guest.  The $2,000 figure is a large enough number to make the message clear: front line employees should act first, make the customer happy, and ask questions later. Many employees know how to make a customer happy but lack the confidence to act. Giving employees some spending authority will speed up the resolution of customer issues and empower your team to do the right thing when you’re not there.

The sunshine is beckoning, so go ahead and take a vacation – if you follow the six steps here, you may end up with a tan and a more valuable company. 

Growth vs. Value: Not all Revenue is Created Equally

When you look ahead to next year, will your growth come from increasing your average dollar sale and average number of transactions per customer, (selling more to your existing customers at a higher rate) or finding new customers for your existing products and services through lead generation?

The answer may have a profound impact on the value of your business.

Take a look at the research coming from a recent analysis of owners who completed their Sellability Score questionnaire. We looked at 5,364 businesses and found that the average company that had received an offer from an acquirer was offered 3.5 times their pre-tax profit.  When we isolated just the businesses that had a historical growth rate of 20 percent or greater, the multiple offered improved to 4.3 times pre-tax profit, or about 20 percent more than their slower growth counterparts.

However, the real bump in multiple came when we isolated just those companies that claim to have a unique product or service for which they have a virtual monopoly. The niche companies enjoyed average offers of 5.4 times pre-tax profit, or roughly 50 percent more than the average companies, and fully 20 percent more than the fastest growth companies.

Nurture your Niche

Chasing “bad” revenue by offering a wide array of products and services is common among growth companies. The easiest way to grow is to sell more things to your existing customers, so you just keep adding adjacent product and service lines. But when a strategic acquirer buys your business, they are buying something they cannot easily replicate on their own.

A large company will place less value on the revenue derived from products and services that you have in common. They will argue that their economies of scale put them in a better position to sell the things that you both offer today.

Likewise, they will pay the largest premium to get access to a new product or service they can sell to their customers. Big, mature companies have customers and systems, but they sometimes lack innovation; and many choose a strategy of acquisition as a way to buy their innovation.

Focusing on your niche is one of many areas where the long-term value of your business is at odds with short-term profit. For example, if you wanted to maximize your short-term profit, you might avoid investing in new technology or hiring a head of sales, arguing that both investments would hinder short-term profit. The truly valuable company finds a way to deliver profit in the short term while simultaneously focusing their strategy on what drives up the value of the business.  

At ActionCOACH our definition of a successful business is a commercial profitable enterprise that can work without the business owner.  Our 6 Steps process helps business owners by coaching them to define their niche and at the same time focus on the 5 drivers of profitability to increase cash flow.  We then help you to leverage your business by creating systems and helping you to find and keep motivated team members to "work in" your business.  This will give you the time and cash flow to plan and "work on" your future growth and eventual exit from the business.

You can get your own Sellability Score, and see how you compare on the eight key drivers of valuability and thus sellability, by taking our 13-minute survey here at www.actioncooachsellabilityscore.com

Do you have a Black Belt in Business?

What does it mean to earn a black belt in the martial arts?  To become a trained killer.  No,  martial arts training is a lot more.  It's a form of self-defense and exercise.  But, most importantly, it is a philosophy or a way of life.

I got involved in the martial arts at a very early age, but didn't receive my Black Belt in Tang Soo Do Karate until I was almost 30.  I found martial arts was not only a great form of exercise and self defense, but also taught me how to survive the battles of business and life.  When I look back, what I really learned was the importance of goal setting, focus, determination, and the use of systems.

Each martial art has a series of belts or levels, which each student strives to reach before they can become a black belt.  This systematized approach provides students a process to gain mastery over a particular level of skills before moving on to the next level.  Showing the importance of setting end goals with milestones along the way to keep you on track.

My sensei (Karate instructor) taught me that each level you reach before a black belt, you are just learning Karate but once you become a black belt, you are now doing Karate.  Once you reach black belt, you now have the knowledge and wisdom to apply what you have learned.  The journey doesn’t stop there.  There are new goals and milestones as you reach for the higher levels of being a black belt.  As a business coach, I have found this same systematized approached can also be applied to any business.  

When do you get your black belt in business?  When are you “doing” business instead of learning business?  At ActionCOACH we have a definition for this scenario, “A commercial profitable enterprise that can work without you the business owner”. 

So, how get a black belt in business?  Let’s take a look at the 6 belts you must master before you can be a black belt in business.

White Belt:  At this level, the emphasis is on basic business mastery over time, team, & money.  It’s about getting the chaos out of your business and getting organized.  It’s about making sure you can make payroll and that your employees understand their roles & responsibilities in your organization.  It’s where you learn to delegate tasks to your team, so you can concentrate on developing higher level skills needed to obtain your business black belt.

Yellow Belt:  This level is where you work on creating predicable cash flow in the business.  You develop your Niche and USP (unique selling proposition), so you can start selling on value and not price.  You find out why your business is unique and valuable to your customers.

Green Belt:  At this level, you are working on creating efficiencies in your business.  You are starting to develop systems that will run your business so you don’t have to.

Blue Belt:  Here you learn how to get the right people “on the bus”-- the right team players, who will run your systems that will run your business.

Red Belt:  This level is where we start to see all your hard work come together.  You’ll start to see the synergies of your systems and team develop.  Now, you start grooming your general manager who will run your business for you.

Black Belt:  Now you’ve made it!  You’ve created a commercial profitable enterprise that works without you.  You are now an entrepreneur with a business black belt!  You are  generating passive income from the business.  You can now take the skills and knowledge which you have learned and apply them to other businesses or start investing your profits, so your money is making money.

To learn more about how you can turn your business into a Black Belt business, sign up for our next free webinar.  Check out my latest workshops and seminars www.actioncoachseminars.com