When it comes to businesses, looks can be deceiving. For all their power, equity and influence, they can be strikingly frail. Nowhere is this truer than in the world of SMEs.
According to our latest research, two fifths of business owners in the UK (turning over between £1m and £50m) believe that their business could not survive for more than a week without them. To put that another way, if they went on a ten-day ‘unplugged’ holiday, the milk in their fridge would be more likely to survive than their company. And that’s just the more optimistic majority. One in ten believe their company could only survive for a long weekend (three days) in their absence.
This is according to our latest study For Love Or Money in which we worked with more than 500 businesses of varying sizes between 10 and 249 employees to understand the key motivations, wealth, vulnerabilities and working practices of the nation’s small and medium sized business owners.
It doesn’t need to be this way. In fact, there is a very strong argument that the opposite should be true. Fixing the problem of over-relying on oneself is one of the best ways for business owners to not just improve their work-life balance, but also to improve their business security and wealth. It all boils down to three stages.
There is no ‘I’ in management team
Firstly, anyone who has built a company from scratch will know how hard it is in those early days to get things off the ground. They will also know that long hours, a sharp eye for detail and never letting things slip are vital components of early-stage success. However, putting the bootstrapping days in the past and changing your role and focus is a critical part of growing a business, and that means handing over power to others and trusting them to do a job that measures up.
This is one of the hardest transitions that business owners go through, but holding onto a start-up mentality for too long can be dangerous and can limit your ability to reach critical sustainable growth and scale. Small tasks can quickly multiply and take hours – hours that would perhaps be better spent taking a step back and looking strategically at your objectives, targets, risks, opportunities and finances.
Some day-to-day operations may still require attention and direct input from the business owner, but these are often the exception, not the rule. For everything else, the importance of a highly capable and trusted management team is incomparable.
The elegance of design
Author Herman Melville’s character Captain Ahab justifies his pursuit of the white whale by saying that “all my means are sane, my motive and my object are mad”. He perfectly illustrates the point that no matter what it is you’re trying to achieve, the key is to ensure that the system you’ve designed to achieve it works perfectly.
People management might not be a natural skill of every business owner, but there are some simple rules to follow and traps to bear in mind to help build a supportive, effective team that can alleviate the pressure on the business owner and mitigate against the risk of that person being suddenly unavailable to perform at their usual level for a number of days, or even weeks.
It starts with hiring. Once someone is settled into a role it’s not always easy for them to change their perspective or habits, so setting out responsibilities and accountabilities from day one means that the right person is more likely to be hired, and they’re more likely to ace their role when they are.
Leading doesn’t have to be lonely
As valuable as it is, an internal team of smart, reliable managers isn’t usually enough. Isolation from the wider business community can be as damaging as isolation within the company, and choosing the right people to help advise you on decisions within the business is as important having the right people to bounce ideas off and inform your thinking externally.
If your business can’t operate without you, even for a few days, then it’s time to take a long hard look at how that can change.
Michael Davidson is Regional Managing Partner at top 15 UK accounting firm Haines Watts