The Next Step: From Entrepreneur to Investor
Posted: Thursday, October 01, 2009
by Brad Sugars
ActionCOACH
Is there a way to leverage yourself out of your successful business and into the arena of being an investor?
In short, yes!
This is because a business owner is often involved in designing, planning and implementing systems to run a business.
It becomes very difficult for the business owner to get free from the business and hand over duties to others.
This is because all change is difficult due to fear - mainly fear of the unknown.
There is also fear of change, as a move to semi-retirement means an owners needs to change the way the he or she works with the company and team-members, and also in the way he or she views money.
Instead of taking a wage from the business, an owner will now be making money by maximizing profit. This will completely change the mindset of the business owner.
As a result, the owner's whole relationship with the business will undergo a change of mammoth proportions.
To ensure the entire process of change is handled carefully, here are some ways to ensure a smooth transition - making sure the business can operate successfully and profitably without the business owner:
Create the Right Environment: If the existing conditions are not conducive change, transition to any change will be difficult. The team members within the organization should be willing and ready to introduce new systems and should genuinely believe in the urgency and importance of any new system.
The culture should also be focused on change for another reason. There needs to be trust in the business, because change requires people to step outside of themselves and their level of comfort.
Open Communication Channels: One way of creating the right environment for change is having open communication channels so that the business owner is able to communicate with team and vice-versa.
That's why an "open door" policy is so important.
There is a need for effective communication within the business, which means that the messages being communicated are actually received, and understood in terms of content and intention. It also means that they are acted upon, if necessary.
This is because any communication must result in some type of action.
Provide Continuous Feedback: It is crucial to have strong leadership through this process of change.
The owner needs to develop a vision of leadership that steers the company correctly. Constant feedback is important for team members. This can be done by tracking their progress with the system and keeping them in the loop on the developments taking place.
It helps to offer encouragement and support and encourage them to provide feedback.
Communication is a two-way street and it is the lifeblood of any business; make it a priority.
Involve the Entire Team: It is important to involve the entire team in this implementation process. Having an implementation team consisting of a select few will only lead to confusion, frustration and discontent.
In order to have an effective and efficient implementation system, it is essential to have everybody on the team involved.
This will also be a major contributing factor for the business owner, in moving closer to the next goal - letting go of the business and making it work on its own, by handing the reins of the business to those who will be ultimately responsible for running it.
Give Them Responsibility: The business owner can't expect team members to work hard without giving them true responsibility for their jobs. If the business owner gives accountability, he also has to give responsibility. In addition, there has to be a system in place for rewards based on results.
It may be a share of the profits, for instance. This can bring out the best in all the team members.
Delegate: Delegating doesn't mean abdicating to other people; it means handing out the functions completely. It has to do with letting go of control, instead of doing all tasks by yourself.
This is where one can see the true test of a leader.
Hands Off: It can be very useful to a general manager to run the business so that the business owner can step back more easily.
This is one good way of handling this situation, and in this manner, the business owner can leave the business in the hands of the expert who has been hired.
Easing Out: There are a few tips, as discussed in my Instant Systems book that can help a business owner ease out of the business, including:
- Not interfering with the work being done by the team members. They were hired to do the job, so let them do it.
- Giving up a parking space or office. Not having a place in the business will help keep the business owner from showing up all the time.
- Staying away from regular meetings, and just getting a brief from the general manager on the phone or via e-mail.
- Keeping all lines of communication open and remaining accessible.
- Scheduling periodic meetings or visit at the office from time to time, or showing up for specific meetings as required.
Handling Semi Retirement: While everyone hopes to achieve this state, many are not able to handle it when they really retire or in this case, semi-retire.
This is because they have been busy doing things and have been part of something productive.
However, the proposition of not having to go to work and still be paid can also be irresistible. You can deal with this by developing a new circle of friends and associates who, like you, don't have to trade time for money anymore.
But this doesn't mean that the business owner will go back and start working in his business all over again.
This will mean investing.
An owner will now be making money with money to create wealth. While becoming a different type of business person in this sense is more challenging, in the end, many former owners find it is much more profitable.
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Top-level comments on this article: (1 total)Hi Brad.Welcome to Searchwarp.A very insightful and interesting article, full of information and I enjoyed reading it. Thanks for sharing and for writing this article.Best to you.Nenita
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