Changing Your Role In Your Business to Help it Grow

Published on: Sep 20, 2021 by Nancy Mehlberg, CVB, EA

Updated on: March 8, 2023

Essentially, if businesses are to provide launch pads for their owners’ successful exits, owners need to change their perspective, roles, and activities in those businesses.

For that reason, we’ve listed below, in organic order, the three changes that most owners must make happen. We encourage you to think about how each applies to you and your business.

Keep in mind that each change is not a one-and-done event, but part of an ongoing process. As you accomplish the first change, the second comes into play and requires your complete attention. As you accomplish the second change, you begin to make the third and final change.

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HOW DOES EXIT PLANNING PROTECT BUSINESS VALUE?

You must move through each change if you wish to: 1) set the stage for your business to move to its next level and 2) move to the next chapter of your life. Which, after all, is really the point of having a business exit plan.

Change 1 - You must change your focus from growing your business based on your talent and effort to growing it beyond your capabilities.

Change 2 - You must change your role in your company from hub to spoke. Owners who are spokes retain an important role in their companies, but their companies can function and grow well without them.

Change 3 - As you make the first two changes, you gain the freedom (and time) that comes with fewer duties and responsibilities. With more time, you have the opportunity (and we’d argue the task) to explore and develop non-business pursuits.

How Much Do You Need to Change?

It’s likely that you’ve already been evolving as an owner and changing your role within your business. The question now is: How much more must you change?

Change is often uncomfortable and you may feel no need to make any more than is necessary. If that’s the case, or your asset gap is small, you’ve already moved to a more “hands-off-head-up” role, change only enough to create a business with sufficient transferable value to carry you to your goals.

PROTECT AGAINST THE PAIN OF EXITING YOUR BUSINESS

Often a management transition plan can describe most of what you (and your management team) must do. In other situations, owners have already transferred much responsibility to management and their companies now only require their special expertise.

We suggest that you look at your company and determine, with the help of experienced advisors and consultants, what you can do best to further its success.

Business value becomes transferable by:

Delegating to management and others
Creating systems to manage workflow and all other processes within the company
Focusing on growing value in other ways that build transferable value

Ownership Evolution Assessment

Is your business at an inflection point that requires you to make a choice between changing your role and continuing to do business as usual? The following questions are designed to help you determine where you are in transforming your role from the hub of your business to a spoke.

Have you established your exit goals?
Do you know the size of the gap between where you are (financially) today and where you want to be when you exit?
Do you have a written business exit plan that maps out how you will reach your exit goals?
If you are still an army of one, are you willing to become one in an army of many?
Overall, is your business capable of succeeding without you running it?
Is your current management team capable of assuming greater levels of responsibility and growing your company?
Are your current advisors capable of supporting you and your management team in changing your roles?

5 CRITICAL ELEMENTS OF A SUCCESSFUL EXIT PLAN

Answers are not right or wrong, but they do provide you insight about whether:

You are on the road to creating a business that can run successfully without you. Businesses that do not depend on their owners to succeed have transferable value.
Your current involvement in the company needs to change to allow faster growth. If so, consider what role you should take in the company.
Your current advisors have the experience and skills necessary to help you create a business with transferable value.

Changing your role, and thus creating a business with transferable value, involves installing and using financial controls, operational systems, and hiring, motivating, and retaining next-level managers.

CHANGING YOUR ROLE IN YOUR BUSINESS TO HELP IT GROW

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Biz Tip Topic Expert: Nancy Mehlberg, CVB, EA

Nancy is a Principal with SVA Certified Public Accountants and helps clients improve their company profitability and protects their interests by clearly understanding their future goals. She works closely and proactively with clients with an emphasis in business and income tax planning and financial reporting.

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