On a bicycle wheel the hub and spokes are critical components, though one is clearly more significant than the other. If one spoke breaks, the bike will still function, but if the hub fails, it’s all over. The ability for the wheel to spin is dependent on the hub.
When it comes to business ownership, you are the hub. Your connection to employees, customers and vendors are the spokes, and the employees, customers and vendors are at the end of those spokes.
Are you also the hub in the daily operation of your business? One of the biggest drivers in the value of your business is how dependent your business is on you in the daily operations. Do most of the decisions in your business travel back and forth on the spokes to the hub (you) or do they travel along the outer wheel by-passing the hub?
If you think you might want to sell your business someday, one of the first things a prospective buyer is going to want to know is how well the business will run without you, even if your business is generating a profit. If it turns out “you are the business” what you have is more accurately a really good job, not a business someone will pay a lot of money for, unless they want to buy your job. As much as business owners hate to admit it, the reality often is that far too much of the business travels through them at the hub. Even if it does not outright fail, the hub becomes the limiting point for growth and volume – in your case the ability to handle all the aspects of the business that flows through you. There are only so many hours in the day, and if you are too involved with the daily decisions of your business, you are probably already working most of them!
Steps to reducing dependency on the “hub”
- Document what processes and decisions currently require your involvement
- What can you delegate to others?
- What can you automate or outsource?
- What business relationships could be handled by someone else on your team?
If you honestly want to know how your business will run without you, you need to conduct a short test. Take a vacation! If the rest of your team have been trained and empowered to make decisions, you will be able to get the time away you deserve. If all goes well, you’ll know you have more than a job for yourself, that you are building a business with value.
Be sure to check in with us when you get back. We’d love to hear about your vacation and how smoothly things rolled along in business during your absence!
