For many small business owners, they run the show. Owners often have too much on their plate to make any real progress. This includes creating a marketing and sales strategy, as well as taking on leadership roles such as MD or CEO.
There are business owners out there with the belief that success only comes through relentless effort and complete control of their company.
However, the truth is that working harder and longer hours doesn’t always equate to stronger business value.
In fact, it can often hinder growth and limit potential to grow value exponentially. Throughout this blog post, we’ll dive into the concept of laying off the gas to grow business value. We’ll also explore the concept of stepping back to grow value and how delegating tasks can lead to exponential scaling and increased profitability for business owners.
We’ll even draw inspiration from the idea of taking summer trips as a test of how a business can run without its owner’s constant presence. For more on working less to create value, check out this Forbes Article!
Transitioning from Startup to Growth Phase:
In the early stages of a business, founders typically wear multiple hats and handle every aspect of the operation. This hands-on approach is necessary for a startup, but as the business grows, it can become a burden. As an advisor, working with your client to develop a business growth strategy can significantly contribute to their long term success and competitive advantage
To move past the startup phase, owners must shift their mindset from execution to strategy, vision, and growth.
The Art of Delegation:
When was the last time you took some time off ? Let’s take some time to run through the benefits of delegating tasks to employees.
Empowering Employees:
- When a business owner takes a vacation, it creates a void that needs to be filled if they are too heavily involved in the day-to-day operations of the business. This presents an opportunity for the employees to step up and take on additional responsibilities. By entrusting them with new tasks and challenges, they are empowered to grow and showcase their leadership potential. This not only helps the business in the short term, but also creates a more confident and motivated team in the long run.
Developing Leadership Skills:
- When owners take time away from the business, they provide a chance for their employees to develop their leadership skills. By temporarily, and eventually permanently, assuming some of the owner’s responsibilities, they gain hands-on experience and learn to make important decisions. This helps them gain confidence, improve problem-solving abilities, and enhances their overall understanding of the business operations. Furthermore, it cultivates a culture of continuous learning and development within your organization.
Identifying Potential Successors:
- Take time to step away from the business, presenting an opportunity to identify potential successors for key positions within the business. Delegate tasks and responsibilities to different individuals, owners gain valuable insights into their strengths, weaknesses, and capabilities. This information can be crucial when considering a future business transfer or promotion. By identifying key employees and nurturing potential successors, you will ensure a smooth transition of leadership and safeguard the long-term success of their business.
Fostering a Collaborative Environment:
- Stepping away from the business encourages employees to work together and collaborate more closely. With the absence of a business owner, individuals are more likely to seek input from their colleagues, share ideas, and work as a team to overcome challenges. This collaborative environment enhances creativity, problem-solving, and builds stronger relationships among team members. It ultimately leads to a more resilient and adaptable workforce.
Enhancing Employee Morale and Engagement:
- Taking a vacation demonstrates that your clients trust and rely on their employees. This boost in morale and confidence can significantly impact their overall job satisfaction and engagement levels. When employees feel valued and trusted, they are more likely to go above and beyond to ensure the success of the business. Moreover, a supportive work environment promotes loyalty, reducing turnover rates and attracting top talent.
Building Systems and Replicating Success:
As entrepreneurs step back from day-to-day operations, they can focus on building systems, automating processes, and creating an organization that runs independently of their daily contributions.
With well-established systems in place, replicating success becomes easier. Opening new offices, branches, or locations becomes feasible without overwhelming the business. Economies of scale improve margins, and the business owner can refine and build upon their achievements.
Where Does Exit Planning Fit In?
What does all of this mean for the overall value of the business? When considering business value, especially in the eyes of a third-party value, they want to know they are acquiring a business that does not rely on the current owner for success. Helping ensure you have a next-level management team in place to keep the business running during the transition of ownership is one of the biggest value drivers to a business. At the same time, taking time away will help them with the emotional side of transitioning out of the business they built because you can preview other activities or causes they are passionate about.
The Bottom Line:
Stepping back to grow value is a fundamental concept for business owners. By delegating tasks and focusing on strategy and growth, owners can unlock the true potential of their businesses.
Taking inspiration from the idea of taking summer trips as a test of a business’s autonomy, entrepreneurs can embrace delegation, build systems, and achieve exponential scaling. Remember, working less can indeed lead to making more. Start embracing the art of delegation and witness the remarkable transformation it brings to their businesses.