How to Work Yourself Out of Daily Operations Before You Sell

Nobody wants to buy a multi-million dollar business that's really just a job. Here's how to change that before you list.

Today, more than ever, there's so much great information out there about selling your business, multiples, what selling to private equity looks like, and what selling to a strategic buyer or maybe just a guy or a gal who's been in corporate America for a long time, always wanted to own a business, and has decided to buy one. There's so much great material out there on these different concepts that, when I was selling my business, I just didn't have access to. What is SDE? What's net benefit to owner? What is a multiple of EBITDA? If you do a little searching, there's all kinds of great information available.

Today I want to talk about one of the most important factors I see in selling a business. There are a bunch, but let me back up.

If you don't know who I am, my name's Scott Miller. I'm the owner of TheGrowthLeague.com. I started The Growth League back in 2009 specifically to help other restoration business owners, and I've been doing it ever since. In 2005, I started a restoration business and sold it in 2017. In 2010, I started an auto glass business and sold it in 2021. Much before that, I started an event photography business, and I sold that right before I started my restoration business.

I've started businesses from zero and sold them. Every year, two or three of my clients sell their businesses, so I go through that process with them. At any given time, I'm working with people who came to me because they know that, in a few years, they want to exit their business. They realize it makes more sense to work on it now than to wait until six months or a year before they're ready to sell.

It just takes longer than that to build a business that can command a higher multiple and is truly sellable. I see different statistics all the time about how few businesses that are listed actually sell. I want my clients to be able to sell.

At some point, you're going to exit your business, and it's typically going to happen one of two ways. The first, and much more common, is that you sell the business. The second is that you pass it on to the next generation. That's much less common, but I actually got together with a father and son a couple of nights ago to have that initial conversation they've been avoiding about what that transition is going to look like.

Anyway, let me get back to this one factor that is so important for every owner to work on.

It's getting out of the day to day operations.

No one wants to buy a multimillion dollar business only to buy a job that involves going out to job sites, dealing with customer problems, handling administrative issues, and taking care of things that the owner of a multimillion dollar business shouldn't be doing. A buyer doesn't want to buy a business like that. Or if they do, they're typically paying a much lower multiple.

So what can you do about it?

Today, make the decision: I'm doing nothing alone.

What does that mean?

You're about to sit down at your computer and do something. Have somebody sitting there watching you. You're writing an estimate or reviewing an estimate, have somebody there observing you.

You're going out to meet with a homeowner to deal with an angry customer. Don't do it alone. Have somebody go with you.

You're taking a phone call from an adjuster who's challenging your scope of work or your pricing. Put it on speakerphone. Have somebody there with you.

If you do everything alone, you're not transferring the knowledge. You're not getting any closer to becoming the owner who's no longer involved in all the daily operations. The owner who isn't the bottleneck.

Think about that mindset of, "I'm not going to do anything alone from now on."

Now, might there be a time when you've got to go out to a home and no one is available because they're all on jobs? It could happen. But if you have the mindset that you're never going to do something alone and you hit 80 percent, that's pretty good, right? It's a whole lot better than zero.

So the first step is to bring somebody with you, and then have a conversation about it. I like to use this really simple acronym to frame these conversations: LBNT.

What did you like best?

What would you do differently next time?

Now, if you're just teaching somebody how to do something, they might not have a suggestion for what you'd do differently next time, but you might.

You might go out, have a conversation with a difficult homeowner, and then ask the person you're mentoring what they liked about how you handled it. Tell them to be honest. Is there anything they would suggest or anything they would have done differently? It's a great way to have a conversation.

The second step is this.

Now they've observed you doing the task or having the conversation, whatever it is you're trying to teach them. They've observed you, you've had a conversation about it, and now the next time it comes up, they do it.

Start by asking them LBNT.

What did you like best about what you did in that situation?

What would you do differently next time?

Then you give them that same feedback.

Now they're a little further along. They've watched you. Now they've done it, and you've given them feedback.

One of my clients just tried this with an adjuster. They had to call back an adjuster who left a message saying, "Don't agree with your estimate. Need you to call me back."

So my client, the owner, put the call on speakerphone, had his production manager sit beside him, and they had the conversation. Then they went through the LBNT process that I talk about all the time.

A couple of days later, another adjuster called, and this time he let his production manager handle the phone call.

Was it perfect? No.

But it was definitely a step in the right direction.

They had the LBNT conversation right afterward, and now this person is on the road to being able to handle those conversations independently. It might not happen after the first time, but it's a step in the right direction. It's a step toward you no longer having to be the person who does everything.

Because think about it. When you start talking to buyers, they're going to want to know how involved you are. They want to know how deep your team is. They want to know what happens when you leave. When you sell and leave, does the business continue performing at the same level, or does it start to decline?

If you're the only one doing these things, it's probably going to decline.

So let's stick with this.

You've made the decision that you're not going to do anything without somebody by your side, whether it's at the computer or out at a job site. You have that person observe you. You have a conversation about it.

The next step is they do it, and you have another conversation and give them feedback.

Then the next step is they do it alone.

Let's shift the example to estimate writing.

Let's say you're trying to relieve yourself of being the estimate writer in your business. In a lot of cases, this is easier than training someone in the field because you're both in the office. You can have them sit at your desk with you.

The other thing you can do when something is done on a computer is hit the record button.

Use ScreenPal.com or Loom.com and make a screencast video.

Now you've taught it once, and that recording can be used over and over again. We'll talk more about that another time.

The next step is that once the person has learned how to do something and you feel confident they can handle it, you still have to check.

The difference between delegation and abdication is that, with delegation, you're still responsible. You still check.

Abdication is handing it off to Joe, washing your hands of it, and saying, "He's got it. I'm done. I'm stepping away. I'm not paying attention anymore."

I don't like that. I don't see how that works well.

So let's go back to estimate writing.

You teach somebody how to estimate. You teach your mindset. You teach them how you review estimates. Then you hand it off to Joe.

Joe does it, which saves you a lot of time, and now you're just the checker.

That person does it. You check it.

The next step is that you need redundancy.

You don't want to be the backup.

If Joe goes on vacation, gets sick, or gets fired, you become the backup again.

So as soon as you possibly can, identify another person who can back up the person you just taught so that you're not the backup.

Then have the person you've trained do the teaching.

That's going to make them even better because you've probably heard the idea that when you teach something, it sinks in more. You become better at it because you're teaching it.

Now you've got redundancy, which is a beautiful thing.

That's really the last step, getting yourself out of being the backup.

Now imagine you create a list of everything you do. Maybe it's 10 different things in the business that take up 80 or 90 percent of your time.

Then you methodically chip away at that list, just like I did, and work yourself out of the day to day operations.

Maybe you keep a couple of things that are really important to you or that you genuinely enjoy doing.

And that's it.

If you need any help with this, don't hesitate. Reach out to me, book a call, and we'll have a conversation. At the very least, I promise you'll come away with a couple of action items to start making progress.