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Every entrepreneur dreams of funding their freedom by one day selling their business for 10 to 20x multiples or more. Unfortunately, selling for multiple valuations is not as common as we all wish it was. We know it’s possible because we’ve seen it happen, but it’s the exception, not the rule.
So what’s the secret? What makes a business achieve that level of success?
As an entrepreneur and a coach to my fellow entrepreneurs, I have had countless conversations on this subject. After an intriguing meeting with my friend Tom Lambotte, founder of OneDayWorkWeek.com, I now know the secret is to establish processes and systems that allow the business to run smoothly without the founder in place.
When it comes time to sell, the multiples will be dismal if the business is highly dependent on you to run it. If the business is self-running, the payoff has the potential to be exponential.
There’s a bonus to this strategy: You get more freedom before selling the business. You get to work in your zone of genius and enjoy downtime and family time away from the business without guilt.
Related: How to 10X Your Business, Income, and Life
You may be laughing out loud now at the concept of a self-running business and a one-day workweek. But Lambotte has actually done it and believes every business can operate this way.
Here are six steps with implementable tools for creating a self-running business.
1. Vision design
Begin with the end in mind. The essential first step is establishing a clear vision of your long-term personal and business goals and your company’s core values. Then you can break down your goals into annual goals and monthly goals.
Taking the time to establish your goals and reflect on your values is especially important for founders who have more business coming in than they can handle and spend most of their time putting out fires.
Related: Your Vision Doesn’t Matter Unless You Act on It
2. Diagnose and track
Get crystal clear on your biggest challenges and problems and the most important success factors of your business. Make changes where necessary. This step most often requires the objective perspective of a skilled outsider.
Related: Asking For Help Is Good For You and Your Business
3. The right team
You must build a team of A-plus players united around your well-defined goals and values. You can do this by hiring for skill and aligning with company culture. Build systems so that you are always recruiting and easily attracting quality hires and so that you can train and onboard with ease. Additionally, if you’re a founder or CEO working in the nitty-gritty, day-to-day aspects of your business, you either need a COO, implementor and executive assistant, or you need to get effective people in those positions.
4. Process hub
A lack of well-defined processes pulls the leader into every aspect of the business. Identify your core processes, keeping in mind that in most businesses, around 20% of the processes create 80% of the results.
After identifying them, document them well and ensure they are implemented. This is how you create self-replicating team members.
5. Tech return-on-investment multiplier
Leveraging your technology is the secret sauce that can free up time for you and your employees. Are there features or automations in your current software that could save you 10 minutes daily? That’s 40 hours a year.
When everyone on your team seeks out efficient processes, you can accomplish more without hiring more people. A motivator for efficiency is profits, which equals raises. If you don’t know how to leverage your technology, get the help you need.
6. Velocity engine
When you have the right systems in place, it’s time to get your meeting structure and learn how to run effective meetings. It’s also time to teach your team members how to plan their weeks. With all these components in place, your velocity engine will run smoothly, and you’ll be free to work on your business, not in it, one day a week.
