It’s everyone’s dream to have a business to where it runs on its own, it does what it needs to do, and at the end of the day, is not super dependent on the owner to be there. Oftentimes though, there are a lot of service-based businesses that depend on the owner. The owner has become part of the glue.
It’s the person who keeps things pulled together, and ultimately what happens is that they are stuck working in the business versus being able to work on the business. It’s become like a catchphrase these days where working in the business versus working on the business. In an autonomous model, what happens is that when you’re able to create a business that’s not dependent on you, there’s a lot of perks to that.
One is that the business can be able to do its thing and you take your time, go on your vacations, whatever it might be, and the business continues to operate as if you were still there. How amazing is that?
And on the other side, when you’re not super involved in the business and the revenue is not dependent on you, where you’re not having to be there as a leader, you’re not having to perform the work, the business becomes more valuable to whoever is going to buy it.
So think about that if you were to pull yourself out of your business right now, and what would happen to the revenue? What would happen to the overall success?
Let’s say you were generating 70, 80, 90 % of the revenue. Well, once you’re pulled out of the equation and let’s say you put someone else into the mix, who says that it’s going to maintain that same level of success? Which when someone looks to buy the business, where a lot of people who are the solo providers, the solo producers within the business, well, it’s very hard to sell that business to a buyer or an investor because well, if you leave, let’s say objectively, you’re trying to leave the business.
They’re concerned about the risk of you no longer being there and what’s going to happen. That’s where a lot of these drag along clauses and features that come there where, hey, you need to be here to help bring someone in, get them trained up, getting them to produce and operate at the level that you’re operating at to be able to get the value that you want from it. That can be very challenging for people, especially if you’re on the tail end of your career and now you’re looking to retire because well, now you have to stick around longer and maybe that’s not your ambition.
The sooner you can focus on creating a business that is autonomous, a business that can operate on its own, has its own leadership structure, other people who are generating the revenue for the business, and the less dependent it is on you as the owner, the higher the value you can get and the more you can be able to spend the time you’re doing the things that you want to do and the less worry you have to have about is the business going to do or succeed or be enough for your future.
So if you’re really considering this and haven’t really approached it, this is the time to really think about is your business really dependent on you or can you be able to peel yourself back and if you want to go in that direction, now is the time to start looking at it. If you want to chat about this, reach out to us, we’d be happy to have a conversation.
Video Blog:
Every business owner has imagined it: a company that keeps running whether they’re in the office, on vacation, or stepping into retirement. Yet for many practice owners, the reality is very different. They’re the glue that keeps everything together. Without them, the business slows down—or even stops.
This dependency creates two big problems. First, it limits your freedom today. If you can’t step away without worrying, you’re not truly in control of your time. Second, it makes your business less valuable when you want to sell. Buyers are hesitant to purchase a practice where the owner generates most of the revenue. They worry about what happens when you leave.
An autonomous business—one with strong leadership, systems, and a team that produces results—changes everything. It gives you the flexibility to enjoy life while knowing your business is secure. It also makes your practice more attractive to buyers, since its success doesn’t hinge on you being there every day.
If you’ve been wondering whether your business could thrive without you, now is the time to start making changes. The sooner you build autonomy, the more freedom and long-term value you’ll create.
This material is intended for general public use. By providing this content, Park Avenue Securities LLC and your financial representative are not undertaking to provide investment advice or make a recommendation for a specific individual or situation, or to otherwise act in a fiduciary capacity. Guardian, its subsidiaries, agents, and employees do not provide tax, legal, or accounting advice. Consult your tax, legal, or accounting professional regarding your individual situation. Tom is a Registered Representative and Financial Advisor of Park Avenue Securities LLC (PAS). Securities products and advisory services offered through PAS, member FINRA, SIPC. Financial Representative of The Guardian Life Insurance Company of America® (Guardian), New York, NY. PAS is a wholly owned subsidiary of Guardian. Florida Veterinary Advisors and The Next Step Planning Group are not an affiliate or subsidiary of PAS or Guardian. California Insurance License #0K80141. AR Insurance License #15823672. Florida Veterinary Advisors is not registered in any state or with the U.S. Securities and Exchange Commission as a Registered Investment Advisor. The individuals associated with Florida Veterinary Advisors do not maintain specialized licenses or qualifications for the financial services provided to veterinary professionals. 7989827.1 Exp 5/27