5 Signs your Family Business is too Dependent on You
If you were to draw a picture that visually represents your role in your business, what would it look like?
Are you at the top of an organizational chart?
Or are you stuck in the middle of your business like a hub in a bicycle wheel?
When you’re positioned as a hub, everything needs to come through you. Each spoke of the wheel is a person or a decision or a responsibility that only you can handle.
One of the problems with this model is that it can only be as strong as the hub. The moment the hub is overwhelmed, the entire system fails.
In a hub & spoke model, your business is dependent on you for survival – and you may feel trapped by that dependency!
Here’s a list of the 5 top warning signs that show your business could be too dependent on you.
1. You are the primary “rainmaker”
Because you conceived the original vision for the business, you can probably pitch your product or service effortlessly, and you may really enjoy this sales role.
Do you generate 75% or more of your company’s revenue?
If so, you are serving as your company’s economic engine and are likely the primary sales and marketing resource.
Consider replacing yourself as a rain maker by hiring a sales team.
2. Your revenue is flat when compared to last year’s
Flat revenue from one year to the next can be a sign you are a hub in a hub-and-spoke model.
Like forcing water through a hose, you have only so much capacity.
No matter how efficient you are, every business dependent on its owner reaches capacity at some point.
Consider narrowing your product and service line by eliminating technically complex offers that require your personal involvement, and instead focus on selling fewer things to more people.
3. Your vacations… don’t feel like vacations
If you spend your vacations dispatching orders from your mobile, it’s time to cut the tether.
Start by taking one day off and seeing how your company does without you.
Build systems for failure points. Work up to a point where you can take a few weeks off without affecting your business.
4. You know all your customers by first name
It’s good to have the pulse of your market, but knowing every single customer by first name can be a sign that you’re relying too heavily on your personal relationships being the glue that holds your business together.
Have a trusted employee shadow you when you meet customers so over time your customers get used to dealing with someone else.
5. You get cc’d on more than five e-mails a day
Employees, customers, and suppliers constantly cc’ing you on e-mails can be a sign that they are looking for your tacit approval or that you have not made clear when you want to be involved in their work.
Start by asking your employees to stop using the cc line in an e-mail. Instead, ask them to add you to the “to” line if you really must be made aware of something – and only if they need a specific action from you.
Ready to get out of the hub?
The Hub and Spoke model is common in early stages of business development, the phases we call Infant or Youth.
When you’re stuck in the hub, you’re functioning as an employee in your own business rather than an owner.
If you want to grow your business – or prepare it for sale – you need to extract yourself from the center.
Depending on the size of your business, its stage of growth, and your goals – making the move out of the hub may require:
- Training leaders to take on higher level responsibilities
- Developing a culture of excellence with improved trust and accountability
- Building a sales team to replace you as the primary rainmaker
- Implementing the elements of our Prosperity Plan – beginning with deciding to become a business-first family
If you’d like some support making these changes towards becoming a more prosperous business, book a call with one of our advisors – we’d love to chat with you.
Free Video: Building a Great Sales Team
Wish you had other people in your organization that could sell as well as you do?
Join us for this free training to learn how to build a sales team:
- What to look for in potential sales people and sales leaders
- What you need to have in place to support your team to succeed
- Common mistakes and how to avoid them
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