In this episode, Pete Mohr and Octavia Conner dive into the hub and spoke model, a common trap for small and medium-sized business owners. They discuss how to remove yourself from being the center of daily operations, empowering your team and automating processes to build a scalable and sellable business.
Episode Highlights: → The risks of a business overly reliant on its owner. → How to delegate decisions to the lowest level of your organization. → Why documenting systems and processes is non-negotiable. → The role of leadership teams and technology in creating freedom for owners. → How breaking free from the hub and spoke model boosts business valuation.
Resources Mentioned: → Value Builder Assessment: Take this free assessment to identify areas to improve your business value: www.exitreadybusiness.com
Who This Episode Is For: → Business owners trapped in day-to-day operations. → Entrepreneurs looking to scale and increase business valuation. → Anyone seeking freedom and long-term sustainability for their business.
Are you looking to make some changes in your business and your life in 2024? Head over to speaktopete.com and book a chat with me to see if we're the right fit!
Maximize Your Business’s Value with the Value Builder Assessment!
As a business owner, do you know what your company is truly worth? The Value Builder Assessment is a powerful tool that helps you uncover the key factors influencing your business’s value. Whether you're considering a sale, planning for the future, or simply want to grow, this assessment offers actionable insights to increase your business’s worth and appeal to potential buyers.
Don’t leave your business’s future to chance. Click here to take the Value Builder Assessment and start building a more valuable, resilient business today!
Book a no charge Freedom Call with Pete, to see if you’re a good fit for his business coaching or talk to Pete about speaking at your next event head over to http://speaktopete.com to find a time that works for you!
Welcome back to the Business Owner Breakthrough podcast. In the last episode, we explored the importance of customer satisfaction and how it can significantly boost the value of your business. And today we are tackling such a common problem for small business, small, medium sized business owners. It's being too central in the daily operations of the business where everything has to run through you in order to get anything done and all decisions are made either with you or through you. It's called the hub and spoke as far as the value builder drivers go and it's what we're going to dig into today. Removing yourself from the center can make your business far more valuable and sustainable. In so many small businesses, the owner is the hub at the center of operations. And while everything else, the employees, the customers, the process, the products, acts as spoke around that hub. And really what it means is that the business depends heavily on the owner for the decisions for the sales, for the operations, in that all of these moving pieces are always going through the owner. And you know, if you're just starting out, typically that's the way it goes. But if you've been at it for a little while, you got to start thinking about this because there is a ceiling and you won't be able to push through that ceiling once you're at the maximum amount of decision making juices that you have in a given day, week, month, quarter or year. So why would a buyer want a business that isn't dependent on you? Well, it's probably because you're not going to be there anymore after that buyer buys the business. Maybe you will be for a short period of time, but not for a long period of time. And buyers want businesses that can run without the owner's constant involvement, because a business that's too dependent on the owner is a risky business because when the owner exits, there's a high chance of disruption. That disruption could be staff, it could be key accounts, it could be key suppliers. All of those personal relations relationships are no longer going to be around. And if all the customer relationships or the critical decisions are tied to you, a buyer will either walk away or potentially reduce that multiple significantly because they need to replace your role or potentially rebuild that customer trust. We need to start transferring some of that to the rest of the team members so that the new potential owner could be thinking about the fact that I don't have to be reliant upon that owner. We do have relationships, we do have relationships with our customers. We, we do have relationships with our team, we do have relationships with our outsourced suppliers that are helping us deliver the promise. It's so vital that when that person comes and sits in your desk and you're no longer there, they have that confidence. That's what they're paying for, right? If you're in the owners trap, how do you break free from this hub and spoke model? Step one is really delegate effectively and start identifying those tasks that only you handle and delegate them to the trusted employees, all of those lower level ones. I've said this before, I'll say it again because I think it's important that decisions need to be made at the lowest level of the organization. I'll say it one more time because I really do think it's important. Decisions need to be made at the lowest level of the organization every single time. If you're getting in the way of low level decisions within your organization, that's a problem. So how do you do it? You start documenting systems and processes. You create clear written procedures. Not only written even. You should have it on video, you should have an audio because people learn in different ways. We've learned that through the Colby system in previous podcasts as well. Written procedures, video, audio, all these things. But how are they done in your business so that employees can follow them without needing your input and learn in the way that they need to learn so that they can tackle the duties. And when you do go ahead and delegate to them. You're going to have great confidence that it's going to get done the way you want. You're going to have great confidence that's going to get done in the way that you want it to be done. Right. Step three is to build a strong leadership team. Empower a management team to handle the day to day operations. One thing that I've Learned over my 30 years in business is that your team actually wants to make decisions. They want to have power to make decisions and they want to have accountability. So when employees are responsible for different areas in the business, it frees you up to focus on the areas that you need to which are really around strategy and growth. And it also gives them great interest in the business and they're going to be in it for the long haul as well. Step four is to use technology to automate tasks as much as you can. There are so many good technologies out there these days. Implement the technology solutions that can handle routine tasks without needing manual intervention. There's all sorts of things out there. When you think of it zapier or just all the different boards, applications, different things. As much as you can automate automate it. And when we think of automation, it may not always just be a computer automation. It may be a step in the procedure where somebody else actually tackles that for you as part of that process. That may not be able to be automated by a computer or whatever the case is. It might be an outsource partner, it might be somebody else on your team that uses that and it's just part of the automation. It gets to a certain point, that person takes it on and then it comes back to you for final decision decision. However that process works for you is really clearing yourself of the hub and spoke duties that you need to do to create the value in your business. So what are the benefits of a self sustaining business really? It's got to do with scalability. Because once you remove yourself as the hub of the business, scalability can happen. You can grow the business faster when it's not reliant on you. Remember that glass ceiling that we talked about? You can actually crush that glass ceiling, get through it. The other thing that a lot of business owners crave and have very little of is freedom. You'll have more time to focus on the high level strategy, pursue other opportunities, maybe even just take a vacation that you haven't taken in a very long time. Free from phones, free from computers, free. Like all of those things we've talked about in the past around this idea of, you know, working in a nice warm spot or in beautiful mountain setting or something is working in another location. That's not a vacation. What I'm talking about is freedom of a vacation where you don't have have to respond to things that are going on at work when you choose to actually have some time off. The third piece is a higher valuation. That's what the Value Builder series is all about, right? Buyers will pay more for a business that can run without the owner. It reduces the risk associated with the transition and that's what most buyers want. So I hope you've enjoyed this Value Builder series. This is the last. It's number eight of the eight Value builder drivers of your business. And of course, as I mentioned in every episode, for you to have a good idea your percentage, basically it'll give you a percentage of where you land on your value and what you need to do to build it down the road. All you have to do is go over to the exitreadybusiness.com, click that green button that says Value Builder Assessment. It'll take you about half an hour or thereabouts. After you finish it, we'll hop on a call, I'll go through it with you. There's probably going to be some questions there that you're going to have for me along the way so that we can create and hone in on this Value Builder assessment and you'll have a go to plan and you'll know where to work on what of these particular items are going to drive the most value for your particular business. I'm happy to do that with you completely free of charge for the first half an hour and then you can start on your own. Or if you choose, you can have me help you along the way so that we can build value in your business together. As your coach, I love doing that work with my clients, so I hope you've enjoyed the Value Builder series. I encourage you to go back and listen to these MON modules again because every time you listen to them you're going to dig down deeper and think about something else that you forgot or maybe didn't hear in that first go round. So until next time, make it a great day.
