To grow a valuable business – one you can sell – you need to set up your company so that it is no longer reliant on you.
This can be easier said than done, especially when, such as a PR consultant or plumber, what you are selling is your expertise.
To scale up a knowledge-based business, you first have to figure out how to impart your knowledge to your employees, so that they can deliver the goods. However, it can be difficult to condense years of school and on-the-job learning into a few weeks of employee training. The more specialized your knowledge, the harder it is to hand off work to juniors.
Have you read the book The E-Myth by Michael Gerber? If not, you should definitely check it out.
In the book, Gerber talks about a “franchise prototype”. The suggestion isn’t that every business should become a franchise, but every business that wants to scale should think like a franchise.
Franchises have very defined systems and processes to deliver their services. These practices are documented in detail – allowing almost anyone to follow the steps in providing consistent product delivery.
With systems and documented processes in place, your business is in a much better position to scale.
Even then, there are certain specialized skills that not just anyone can do. No amount of documentation is going to magically enable an employee to come up with creative solutions to a problem that builds on years of experience.
An Ounce of Prevention
The key to scaling up a service business can often be found by offering the service that prevents customers from having to call you in the first place. You have to shift from selling the cure to selling the prevention.
Fixing what is broken is typically a hard task to teach; however, preventing things from breaking in the first place can be easier to train others to do.
For example, it takes years for a dentist to acquire the education and experience to successfully complete a root canal, but it’s relatively easy to train a hygienist to perform a regularly scheduled cleaning.
It’s almost effortless for a real estate manager to hire someone to clean the eaves trough once a month, but repairing the flooded basement caused by the clogged gutters can be quite complex.
For a master car mechanic, overhauling an engine that has seized up takes years of training, but preventing the problem by regularly changing a customer’s oil is something a high school student can be taught to do.
For an IT services company, restoring a customer’s network after a virus has invaded often takes the know-how of the boss, but preventing the virus by installing and monitoring the latest software patches is something a junior can easily be trained to do.
Take a Step Back
When you’re selling your expertise, it can be tough to hire a team to do the work for you. As ironic as it sounds, sometimes the key to getting out of doing the work is to offer a preventive service, which not only maintains your business income but also eliminates the need for someone to call you in the first place.
Take time to step back from your personal involvement in the day-to-day so you can look at your business from a higher level. Consider the services you offer today and how you might be able to shift those solutions to add more scalability (and sellability) to your business.
If you think you’ll want to sell your business someday – like over 80% of business owners – you should start taking steps to maximize your value well in advance of considering a sale. Would you like to learn how to value a business, get an idea of how sellable your business is right now, and learn how you can improve the value? Let’s talk about your options.