There are a lot of ways to judge the success (or lack thereof) of a small business: how much stuff they sell, their profits, number of employees, years in business or any combination of these things. Each of these factors is important (perhaps irreplaceably so).
But I want to suggest that a small business will not be as successful as the owner wants it to be until it is ready to be sold. And to be sold, (a) a small business must be able to survive without the present owner showing up every day, and (b) there must be a willing buyer with sufficient resources to affect the transaction.
Most of the time, both of these things can be done only by sufficiently developing the people under you. Let me say it another way: if you own a small business, until you have developed your successor, your small business is not truly successful. In fact, it is highly vulnerable.
Owning a small business often means you simply own your own job. Nothing wrong with that, but if that is the case, you have nothing to sell. The only way to create sufficient value in a business so that you have something to sell is to so organize the business that it can thrive apart from you.
Additionally, very few individuals who would naturally be inclined to purchase a small business have the financial resources (yet) to do so. Therefore, most small businesses are sold based on inter-family financing (in which the buyer borrows money from mom and dad) or owner financing (in which the buyer pays owner for business over time; the owner holds a note during the payment period).
Suppose none of your employees is capable of running the business. Then you need to ask yourself why that is.
I find many small business owners can do it all: sales, operations, logistics, personnel, accounting, negotiating…the list goes on. In fact, let’s admit it, there is a huge ego stroke when you are told over and over how important you are to the running of your business.
The truth is that most small business owners can do everything but reproduce themselves. Yet that may be your most important task when it comes to maximizing the value of the business.
John Maxwell says, “The more people you develop, the greater the extent of your dreams.” I would add, the greater your freedom.
Next week, I’ll walk you through the four steps necessary to develop your people and ultimately to find and develop your own successor. It isn’t an easy, automatic or guaranteed process (what is?). But it’s one you can hardly afford to put off any longer.
Failure to reproduce yourself now is failure to be free later