Recently, I learned of a discussion one of my colleagues had with a professional contractor who has only been in business for a couple of years. The company is doing very well – the crews are delivering quality work, and referrals are filling the schedule. Still, the contractor lamented, when I was on a crew, all I wanted was to go into business for myself. Now, I feel even more pressure as I try to keep my crews employed, service my customers, and run the administrative side of the business. This isn’t exactly what I imagined.
To this, my colleague replied, well, are you a business owner or a business operator? This reflective question reframed the contractor’s thinking.
When it comes to preparing a business for sale, we know that the most attractive buyer is one who wants to be a business owner, not necessarily a business operator. Buyers are attracted to a business that is self-sustained in the absence of heavy oversight. This allows the buyer to lead the company, maintain strategic involvement and benefit from equity ownership, without bearing the full responsibilities of day-to-day operations.
Said differently, if you, as the owner, still identify primarily as the operator of your business, it is time to make changes. The transition from operator to owner involves the following:
- Product Delivery: ensure your team can deliver or make the product to the same quality standard without your hands-on involvement.
- Sales & Support: once the team can deliver the product without your help, ensure the team can interface with customers to sell and support the product in a way that meets your brand & company standards.
- Operations: once the above categories are working independent of your involvement, turn to the business processes and back-office operations. Depending on your business, this could be one talented general manager, or if larger, it might require managers for each key discipline in order to finally off-load the operations from your plate.
- Strategy: with the key business disciplines now self-sustained, focus on strategy to find more revenue, protect processes and people you have put in place.
Step 4 is the position an owner really wants to be in, and the role which a good buyer will find most attractive.