March 22nd, 2021 Taxloopholes.com Advisor
Over the past two decades, I have had the privilege of working with business owners and entrepreneurs across various industries and markets. The majority of business owners I have worked with are hard-working, passionate individuals who have the capacity to do great things. Yet, they struggle to scale and grow their business due to a lack of time. Often times, these brilliant business owners are working 60-plus hours a week and can’t recall the last time they actually took a proper vacation, yet they still can’t get their business to the next level.
Which begs the question, why?
Nine times out of 10, it has to do with their business’s lack of owner independence.
To prove my point, I often ask business owners if they can pass the “hit-by-a-bus” test. The premise is simple: If you were to get hit by a bus today and had to spend an extended period of time in the hospital, how long could your business run without you? For the majority of business owners, they fall somewhere within the 90-day range. Which means that after 90 days, they will have to close their doors for lack of sales, capital or leadership.
If you can beat the odds and build a company that will keep running smoothly in your absence, you will have accomplished “strategic depth.”
In Part 2, of my three-part series, I will discuss ways that business owners and entrepreneurs can build organizations that continue to grow and scale even if you, the owner, aren’t always present. If your business has strategic depth in sales, production, accounting, etc., the department will run without you having to have a hand in its operation. Should you lose a key employee or team member, you have the systems set up to handle things and keep the momentum going.
Begin the process by asking yourself, “What are the three main things I can do in the next 90 days that would do the most to reduce the business’s reliance on me in a critical area?” In other words, how do you set your business up to pass the “hit-by-a-bus” test?
Are you the only one with the alarm code in the office? Are you the only one who has the ability to sign payroll or vendor checks? Are you the only one who handles sales and marketing? Whenever you find a critical area that relies on you to be present, look for a way to cross-train another team member to handle the task in your absence.
After the first 90 days are up, do the process again and again. Each quarter, look at your tasks and see where you could cross-train another team member to gain strategic depth in your area of the business. And encourage your executive team to do the same. The only thing better than passing the “hit by a bus” test would be if you were able to handle two or three executives out of the office at the same time.
The last bit of advice I have on strategic depth has to do with designing yourself out of the equation early on. When a task or project comes across your desk, immediately hand it off to a team member with instructions to cross-train another staff member. That way you build strategic depth into the process on day one, thus creating a solid foundation with little or no input from you.
Join me for Part 3 of this series, where I will talk more about your executive team and how they play a role in creating a company independent of yourself.