Owning your business
Do you own a business or are you a business owner?
Sounds a stupid question, playing with words. Yet there is meaning in my madness.
When I first met Matt Driver, former owner of Mint IT in Wakefield, he was in the business owner camp. It was a title or role he had. Better than working for a boss, more being your own boss. Yet the business demanded a lot of time, effort and emotional input. Far more than a normal job. But there were some benefits. A bit of time flexibility, that feeling of being in charge of your own destiny and ultimately the vision that he could own a business.
Owning a business is like owning a house or some other asset. You could sell it and get a bigger one. Or you could start small, at least with a house, and develop it into something worth more.
Taking Control
How did Matt change from being a business-owner to owning a business? Nothing dramatic changed on paper. Yes, his company cars became more glamorous, his pension contributions increased and the time spent at his desk reduced. All the big change was in the people around Matt and in his head.
The biggest single change that let Matt ‘own’ his business was creating structure and organisation in the business. This included standard operating processes and systems but most importantly it was a team of people around him who did all the roles the business needed – Operations, Customer Service, Sales, HR, finance, etc. Learn more about Standard Operating Processes here.
The team was able to run the business without Matt most of the time. He didn’t need to be in the office everyday. I remember when he and Julie, his wife who also worked in the business, took a 2 week holiday on a yacht off the coast of Croatia. Pure relaxation. No work to worry about.
The Payoff
That was when I saw Matt and Julie getting the rewards of owning a business – it was that sense of freedom. Of course, freedom can mean different things to different people, but it usually comes down to the freedom over how you spend your time, what you do with it and who you do it with.
And freedom doesn’t just arrive like the flick of a switch. Matt and Julie had to work hard to earn their freedom and hold of it. So, while you can’t buy happiness, you can buy personal freedom. It comes from having enough wealth set aside that your work becomes a choice, not an obligation.
Building Value
I remember talking to Matt and Julie about how much money they needed to be able to live without working. That doesn’t mean retirement. It means having the choice to work or not. That conversation got round to how sellable the business was and how much they could expect to get for it. They did the Value Builder assessment with me several times over the years and their score gradually increased. As the business grew in size the EBITDA grew and as the team capability grew the potential profit multiple grew. Learn more about the Importance of Building Value.
Until Matt and Julie pressed the button and put the business up for sale. The story of the sale process is best left to a separate telling. Matt was able to share his experiences and learning with the Value Builder Peer Board, co-chaired by me and Martin Allison. The Board members are business owners like Matt who want to have that freedom to have choice over their time.
Matt and Julie have their freedom. You might see them on your travels around the UK. They’ll be in that mobile home you might pass on a dual carriage way or see parked up near a beach.
Want More?
Read our latest blog about The Importance of Cash Flow
Read about the 8 Drivers of Company Value