One of the most difficult transitions is from being embedded in your business to extracting yourself so it runs itself. If you ever want to be a successful entrepreneur then you have to do this in whatever business you own. You need to consider where you are in the growth cycle and clearly create a vision of the size you want to become and by when. Then produce a people plan and structure based on that.
For example, if you are at £3m turnover and you are embarking on a further growth cycle to take you to £15m turnover in 5 years, have senior people on board right now that can achieve this. You may have some that with training and coaching have the ability to grow. If you go down this route, ensure that they are committed to the investment. You both need to have the same goals, so do not push those that are not comfortable.
Most companies will need to look for people externally and this can be difficult. Ensure you keep very high standards, seek other people’s views, do masses of research, and get recommendations when employing senior staff. You get what you pay for. Employ the best. In many cases, to secure good people you need to offer a good package. If they are senior appointments they should be incentivised with share options at the appropriate time so they are tied in. These senior people need to be able to grow so over time you can distance yourself from the business. A potential purchaser is going to want to see that when you are not there the asset does not diminish in value.
You need to embed a culture of positivity and high standards throughout the organisation. Have development programs in place to motivate your staff on to better things. You need to have a scenario where your staff look forward to going to work each morning, and there are few companies that have achieved that. Go for accreditation with something like Investors In People, which a future purchaser would recognise and applaud. Your workplace must be a vibrant and positive environment that any external person clearly sees when they visit. Does this confirm and represent people’s perception of your brand and core values?
All staff that add revenue should be incentivised based on achieving targets with further incentives for overachieving. Never have a cap on earnings otherwise your star sales people will hold back from achieving their best. Why would you hold them back by restricting their earnings when they can make you more money by keeping them motivated?
Ensure that your infrastructure is robust and balanced and that you have enough focus on both quality and quantity. All areas must be stress tested so when it comes to due diligence there will be no issues.
We are entering a new era where service excellence is now becoming the key focus. This should have been the key focus anyway, but so few companies have been doing it successfully. Those who have not need to immediately change otherwise the chances of success are limited. You need to ensure that all the above are achieved at least twelve months before your financials peak as that is the time you should be getting ready to market your business.
Having built and sold my SME, I now work with SMEs. I understand their model by embedding myself in the senior management team so I feel the heartbeat of the business. All areas are covered, but the four questions that we work on solving are: How do I grow my business?, How do I achieve client excellence?, How do I make more profit?, and Does my business model deliver?
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