The second year of running your company is notoriously tough, but for business owner Chris Ashton, the ground was cut out from under his feet--literally. Ashton, 38, began his second year as co-founder of Petplan Pet Insurance with a fall from the second floor ledge of his New Jersey home, suffering injuries that kept him out of the office for five months. Suddenly, Ashton had to face the question many entrepreneurs fear: Can my business run without me?
Making sure your company can operate in your absence should be a basic element of business planning, but many entrepreneurs don't consider the possibility until it's too late, says William Rothwell, author of the book "Effective Succession Planning" and president of Rothwell & Associates, a State College, Pennsylvania-based consulting firm. "We tend not to want to think about terrible things like our own death or disability," says Rothwell. "Planning for short-term and long-term replacements is key."
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After his fall, Ashton realized he and his wife Natasha were still micromanaging the company since founding it in 2006 despite their staff of ten. The duo did everything from running meetings to signing checks to making sure printer cartridges were replaced. The accident, says Ashton, "was a big wakeup call for us. We learned very quickly that you have to spread the knowledge."
But how do you do that? Here's how to get started.
Get Your Job In Writing. It's easy to become mired in day-to-day tasks and lose track of how you're running your company. Knowing how you spend your time daily is key to ensuring your business can run without you, says Rothwell. "To say, 'Who can jump in and do my whole job?' without unbundling what that job requires is not possible.'" Ask yourself: What are the short-term and long-term aspects of the business you take care of? Write them down.
Prioritize. You'll find that certain responsibilities stand out among the many. Identify your priorities and start thinking about what would happen if you weren't around to do those tasks, says Rothwell. This ensures that if you're pulled away from your job unexpectedly, the people who step in will know what to tackle first.
Create Processes. Writing out step-by-step instructions for your most important tasks will ensure those responsibilities are taken care of in your absence. Whether it's payroll or tracking sales and expenses--responsibilities that business owners tend to guard closely--making sure someone else knows how to handle those tasks is essential. For example, after Ashton's fall, he switched from manually signing every check himself to using an electronic signature.
Make sure to think long-term, too. Sonny Clark, founder of the Nashville, Tennessee-based IT-consulting firm Advanced Network Solutions, had been running his business for nearly ten years with a dozen employees when he was diagnosed with Leukemia six years ago. But it was not until the week before he went into the hospital for a bone-marrow transplant that he drafted his will and realized it was too late to put together a buy-sell agreement. "The time to do it is not when you are sick in the hospital," says Clark, who has been in remission for five years. "You want to negotiate those kinds of things before you need to."
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Identify People Who Can Step In. Make a list of all your key contacts, starting with employees, vendors, clients, bankers, accountants, and lawyers, and think about who could take over each of your responsibilities. "Don't think necessarily of just one person as a replacement," Rothwell says.
Susan Carter, author of the book "How to Make Your Business Run Without You," suggests jotting down the key strengths of each of your contacts so that work can be delegated more easily in your absence. You might even think about which competitors could best handle your customers if need be, she suggests.
Step Back While You Can. It often takes an emergency for small business owners to realize they don't need their hands in every aspect of the business. At Petplan, Ashton and his wife found they didn't have to run every meeting if they created team leaders rather than overseeing the company's sales and claims teams themselves. "That really helped us take our hands off and give other people responsibility," he says.
Getting away from day-to-day chores has also allowed Ashton to spend more time on the company's long-term growth including raising money, expanding marketing efforts, and launching a new pet health magazine called Fetch. Today Petplan has fifty employees and an estimated revenue of about $30 million, up from $19 million last year. "The accident helped us step back and not be mired in the day-to-day operations," he says. "We can focus on the bigger issues.
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Comments:
Irreplaceable? Cemetery is full of Irreplaceable people.
well to ask someoone to take over your job and the likelyhood that they will do it is dependant on wether or not they will get payed more
I really like this approach. Now, what if employees took the same approach -- would they turn into truly irreplaceable components of the company by accelerating their production and value?
I loved this article...I think the goal any entrepreneur is to work less and make more. Setting up your company so one day OTHERs can run the company the same way you would run is really going to be the key to your ultimate success. Jen Varner www.pure-ecommerce.com Rule Your Life...Onw Your Own Business
i run an ecommerce consulting company and have close to 12 employees but i always felt none of them can actually conclude anything properly without my supervision. For about 4 years of the company, i have to review all mails and proposals leaving the company, i have to attend all meetings with clients, i have to sign all checks and no decisions can be taken without me. the quantity and quality of job delivered to clients was dropping despite the fact that more hands were engaged. I usually forget my launch while my employees never miss theirs. My health was dropping, so also was my family complaining of not having enough of me. I could not think of vacation for the mere fear that nothing will work in my absence until i fell seriously ill and was in bed for a week. While on sick bed, i kept thinking of series of complaints from clients i would meet on my return. To my shock, i got back to work to find out that things were perfect and my clients were all happy with sudden turn around in service delivery. I immediately took a 2 week vacation outside my country with my family and came back happy and refreshed. Apart from this,the business has expanded as i now realised that i have people who can actually handle things and properly do them better than me. I wonder why it took me so long to realise this.
Great article. "Step back while you can" is so true.I also agree during emergency, we ask ourselves the question-Why didn't I train some one? It can be quite challenging for a Solo Entrepreneur/Self employed professional to implement this tip, while most of his/her time and energy is focused on creating revenue.
Good article, we have a family business which depends mainly on the founder and owner, my husband, I think we need to do some planning for the steps you mentioned, the problem we face all the time is stability of employees, because employees in our area are all expats, they keep changing, and we keep training all the time.
Your article did not mention Disability Overhead Insurance. It is not as well known as regular Disability Income insurance. It does not replace a sick person's income. What it does is pay overhead expenses and employee's salaries if the business owner is laid up. It allows the business to continue while the business owner recuperates. It may not be as popular as traditional Disability Income insurance but it does exist.
Good article. I own a small business with 25 employees and had an illness a few years ago that required a three week hospital stay and two month rehabilitation. I hadn't prepared and was literally laying in my hospital bed gasping for breath while on the phone directing the steps to do the payroll and pay bills. The time to prepare is while you are healthy.
It is nice informative post. I have really enjoyed by reading this post. Thanks for sharing.
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SOP, SOP, SOP, SOP ... I can not say that enough. Make sure you put in writing, preferably somewhere where the team can find it, the daily activities and step by step procedures needed to make sure the business can run while you are not there. One of the things I learned a long time ago working for private companies is the notion "what happens to things you are working on if you got hit by a bus". Gruesome to some extent I know, but reality sets in and you start formulating a plan to make sure things continue on in your absence.
Really cool writing! the key to setting up your own business is, I feel logistics management and diversifying
Excellent article thanks for sharing. and what you suggested that sometime more dependent business on owner can be the negative for the business and one kind of barrier. I think none has even think of this issue. But the problem is that find such person due to whom business can not depend on owner, is really the hard thing , and as we can found many cases of fraud these days. So one has to be aware for thing thing when not want to make all our business depend on own self.
Great article. One additional thing to consider is having a Disability Income Insurance Policy on the owner to cover business overhead expenses
What about finding out if your boss is cheating and collecting evidence for blackmail purposes? That would be my primary strategy.
Hi Mike, I don't think the full url came through. You might want to repost.
This article really speaks to me. Right now, my business has not reached the stage where I can employ people but I wish it were. It would make going back to school right now much easier. I'll keep this in mind though as my business grows.
I love this article. The question is: How do you make yourself replaceable? The key is to adopt quality management practices as defined by the Baldrige Performance Excellence Framework (Baldrige.gov). I explain how to do this in a short eBook I wrote for an outreach project of the SBDC Think Tank. You can download a free copy at http://www.smallbusiness-break... Let me know if you like it...
And isn't a business that's less dependent on its owners is a more saleable business, and therefore one worth owning?