By Sancho Simmonds, Assurance and Business Services Partner at Smith & Williamson
Owner managers are often the biggest barrier to the growth and success of their own business. Few businesses achieve a successful transition from "owner" dependency to "management team" dependency.
Start with the end in mind
- Recognise that businesses that are wholly dependent on the activities and performance of their owners are unlikely to attract a significant capital value on a sale
- Most businesses are owner dependent at the outset. This is natural, but the skill lies in reducing this dependency over time
- At the point of sale, the business should be able to run without the involvement of the owner, except where the owner is performing a line management role that can be filled through normal recruitment or search
What you should do
- Take charge of the strategy of the business and focus on the big issues
- Hire the best people you can afford to employ
- Let go of routine management tasks
- Give your managers the tools and authority to do the job
- Motivate and encourage your management team
- Develop the team's skills, knowledge and understanding
- Make independence of management clear to all your stakeholders
- Maintain a sensible work/ life balance
What you shouldn't do
- Abrogate your responsibility for the management of the business
- Interfere in the day to day activities of your managers
- Undermine or criticise the activities of managers in the eyes of staff
- Introduce unnecessary and/ or burdensome management systems
- Take credit for the success of other team members
- Allocate responsibility without authority
- Lose sight of your objectives and goals
Be a strategist. Aim to spend at least a third of your time thinking about the future of your business. Try and work "on" the business, not "in" the business.
For help on reducing owner dependency in your business, contact Sancho Simmonds on 020 7131 4590 or email email@example.com
This article is part of the Entrepreneurs' Toolkit series, produced by Smith & Williamson. More information on this and other toolkit topics is available at www.smith.williamson.co.uk/entrepreneurs
By necessity this briefing can only provide a short overview and it is essential to seek professional advice before applying the contents of this article. No responsibility can be taken for any loss arising from action taken or refrained from on the basis of this publication. Article correct at time of writing.
Smith & Williamson LLP
Regulated by the Institute of Chartered Accountants in England and Wales for a range of investment business activities. A member of Nexia International.
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