One of the significant problems with small businesses is that they are often built around the personality of the founder. This works fine until you get beyond 5 employees and then it becomes a liability.

A personality-driven organization thrives on creativity and flexibility, which is great for creative businesses. However, a company without any systems or procedures cannot grow past a certain point.

Once you decide that you actually want to have a business that will outlast you (or be able to be sold someday), you must have a systems-based organization, not a personality-based organization. What does that mean? That means that everything in the company has to be broken down into a specific sequence of steps that translate into clear procedures, processes and roles and responsibilities.

When you have a systems-based business, you then have a business that can run without you. Most entrepreneurs have the fantasy of having a business that runs without them, however they do not have a sufficient team or infrastructure that will allow it to run successfully in their absence.

That is why when company owners get to a certain level of their business they can become extremely burnt out, frustrated, overworked and feel like they can never leave. They feel like the whole company depends on them, the customers depend on them and, while that can be satisfying to the ego, it is a very short-sighted strategy for creating an exit plan.

The benefits of creating a systems-based business with a strong foundation and clear infrastructure is that you can begin to turn over more and more responsibility to your staff and they WILL pick it up and take ownership of it, if you let it go. Employees are anxious to be well-used and do meaningful work. The fact is that you, the owner, are usually in the way of that happening.

A good example is of an outdoor adventure company in North Carolina. The owner has been there for 20 years and the staff do their jobs really well, but there’s no upward mobility in the company. The owner would like to sell their company, but they never instituted any systems and structures for clear hiring processes, weekly team meetings or even job performance reviews that would insure that the business could run on its own without the owner’s constant attention.

In organization development there is a name for this: it’s called “the Founder’s Syndrome”, and it speaks to the inherent difficulty that most founders have in letting go.

Here are the steps that any small business can take to begin creating a systems-based company:

Step 1: Create a clear hiring process

Step 2: Have regular semi-annual performance evaluations conducted by both the employee and you, the owner or manager.

Step 3: Put together a simple employee manual that everyone signs off on.

Step 4: Institute regular weekly or bi-monthly meetings with your team to make sure everyone is on the same page and knows what your vision and goals are.

Here’s a success story of a company that implemented these steps: When I started working with them, they had 35 steps to close a sale and the revenues were hovering around $350k a year. There was no clear hiring process and no marketing strategy. Fast-forward a year later, the sales process was condensed into 5 steps, revenues grew to $850k a year and the team was noticeably more excited about coming to work. As a bonus, the owner felt totally supported by his team.

That is what’s possible when you transition from a personality-based company to a systems-based company. Your employees support you and you are able to watch your profits grow, instead of micro-managing the details with no end in sight.

Are you up to the task to make the shift in your business? If you are, I will offer you a free 45-minute Business Consultation to create your successful exit strategy.


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