Summer is here, and although it may seem strange, now may be the perfect time to increase the value of your company.
The most valuable companies are the ones that can run independently of their owner. A buyer will pay a premium for a company that runs on autopilot and levy a steep discount for a business that is dependent on its owner.
This summer, consider taking an extended break from your business to see how things will run when you’re not around. It’s probable that some things will go wrong, but use those mistakes as learning material to make your company operate more independently of you – and therefore more valuable.
Here is a six-step plan for profiting from your vacation this summer:
Step 1: Schedule your vacation plus one day
Whatever day you plan to start working again after your vacation, come back one day later. That way, you’ll have a full day of uninterrupted time to dedicate to understanding what went wrong in your absence.
Step 2: Bucket the mistakes
When you return, make a summary of the things that went wrong and categorize them into one of three buckets:
- Mistakes: there is a right and wrong answer and the wrong one was chosen;
- Bottlenecks: projects that had difficulties moving forward because your feedback and instructions were not there;
- Stalled projects: initiatives that went nowhere while you were gone because you’re the person leading them.
Step 3: Correct the mistakes
The first and best place to start is to just correct the mistakes that were made. For the most part, mistakes are because of a lack of training rather than negligence. The right answer may be clear in your head but may not be immediately obvious to your staff. Write or videotape instructions for next time the employees face the same situation. Make sure your instructions are clear, and share them with your team so everyone has them
Step 4: Unblock your bottlenecks
If you’re being asked for your personal input on projects, there’s probably going to be a bottleneck if you’re not around. Make sure your staff is clear on the projects where you need to have a say and the projects where you don’t. Some employees may wrongly think that you need to approve all decisions. Make it clear when you want them to act alone and when you still need to have a say.
Step 5: Re-assign stalled projects
The hardest part of making your business less dependent on you is dealing with projects that get stalled when you’re away. Start by asking yourself if you’re the right person to lead the project in the first place. As the owner of your business, projects often fall in your lap by default, rather than because you’re the best person to lead them. Categorize your stalled projects into two groups: a) strategic projects you need to lead; and b) non-strategic projects you are leading by default. Hang on to the strategic projects, but delegate the non-strategic projects to someone on your team who is better suited to driving them forward.
Step 6: Give every employee a blank check
At Ritz Carlton Hotels, they give every employee discretion to spend – without approval from their general manager – up to $2,000 on a guest. The $2,000 figure is a large enough number to make the message clear: front line employees should act first, make the customer happy, and ask questions later. Many employees know how to make a customer happy but lack the confidence to act. Giving employees some spending authority will speed up the resolution of customer issues and empower your team to do the right thing when you’re not there.
The sunshine is beckoning, so go ahead and take a vacation – if you follow the six steps here, you may end up with a tan and a more valuable company.