Working In or Working On: The Doer vs The Thinker
Do you long for the days when you are able to take that family holiday either skiing on the slopes or relaxing by the pool basking in the warm sun? For many business owners this is a dream world that eludes them as they are too busy focusing on the day to day tactical running of their business. Perhaps it’s time to take that break so you can clear your head and focus on some strategic thinking.
The role of a business owner falls into two categories, either day to day Management of the business or Strategically thinking long term about the business.
As a Manager, you are constantly looking at opportunities to improve the business through increasing sales revenue, efficiency gains and reducing costs. You’re setting targets for your team and closely monitoring their performance. You ensure your largest customers are completely satisfied and the quality of service or product is up to your high standards.
As a Strategic Thinker you are determining the long-term path your business will follow, what new products will you offer, what markets will you enter where will you be in a few years? You are the visionary for the business and without you taking time to think, who knows where your business will end up?
The question is, how much of your time should you devote to each role? If your goal is to create a more valuable business—one that someone might like to buy one day— data from The Value Builder System™ reveals that you should start gradually increasing the time you spend on thinking and hire someone else to do the managing.
For example, after analysing more than 30,000 businesses who have received their Value Builder Score, companies of owners who know each of their customers by first name (i.e., managers) trade at just 2.9 times their pre-tax profit, whereas the companies of owners who do not know their customers’ first names (i.e., Strategic Thinkers) trade at closer to 5 times pre-tax profit.
Further, companies that would suffer if their owners were unable to come to work for three months, receive significantly lower offers when compared to companies that would not feel the absence of the owner for a month or two.
Finally, in a survey of merger and acquisition (M&A) professionals, they were asked who they like to see an owner hire if they can only afford one “C-level” executive. The M&A professionals overwhelmingly identified a general manager/second-in-command as the most important role a founder can fill ahead of a chief revenue, marketing or financial officer.
In short, the owners of the most valuable businesses have found managers to ensure the trains run on time while they spend an increasing amount of their energy thinking about what’s next for their business.
If you are thinking “How Do I Sell My Business” or would like to understand more about the The Value Builder System™, please contact Phil Shearing. 01823 275 777
To see how your company scores, you can complete the Value Builder Score Survey and get a report on how you’re doing in each area.
This is a no obligation survey that you may find useful and is something we can discuss if you choose.