On the third day of his first proper holiday in four years, the owner of a small landscaping business takes eleven calls from the team. Where’s the spare key to the trailer? Which client wanted the hedges cut lower? Can we give Mrs Naidoo a discount? What’s the password for the supplier portal? He answers them all, patiently, from a sun lounger, while his family pretends not to notice.
It’s flattering, in a way, to be so needed. It’s also exhausting, and it quietly limits the business. Everything that only the owner knows, decides or can do becomes a bottleneck. Growth slows to the speed of one person’s attention.
There’s a less obvious cost too. A business that depends heavily on its owner is, for that very reason, worth less to anyone who might one day want to buy it, invest in it or simply take it over.
One Like insight: If the business can’t run without you, you don’t own a business. You own a very demanding job.
What owner-dependence costs
The Value Builder System, a business-valuation programme founded by the author John Warrillow, asks owners a series of questions about their businesses, including whether they’ve received offers to buy them. Its analysts have reported on what those offers reveal across tens of thousands of responses.
In one analysis of around 14,000 businesses, companies whose owners knew every customer by first name received offers averaging 2.93 times pre-tax profit. Where the owner didn’t know customers personally and rarely got involved in serving them, the average rose to 4.49 times. The programme has also reported that businesses able to run well without their owner for three months were significantly more likely to receive offers, and higher ones.
This data needs handling with care. It comes from a company that sells a programme for increasing business value, the figures are self-reported by owners, and the link isn’t necessarily causal. Businesses that run without their owner may also differ in size, sector and profitability. But the logic is easy to follow. A buyer of an owner-dependent business is really buying a relationship that may walk out of the door with the seller.
And you don’t need to be planning a sale for this to matter. The same dependence that worries buyers also stops owners from taking a holiday, getting ill without consequences or stepping back to think about the bigger picture.
Getting out of the middle
The eleven holiday phone calls are a useful diagnostic, because each one points to a specific gap. They tend to fall into three types, each with its own fix.
Information only you have. Where’s the key? What’s the password? Which client wanted what? These are solved by writing things down somewhere everyone can find them: a shared document of client preferences, a secure password manager, a labelled key box. It’s unglamorous work, but every item recorded is one fewer interruption for ever.
Decisions only you can make. Can we give a discount? Can we buy a replacement part? These are solved with decision rules: guidelines that let others decide within clear limits. For example, staff may offer up to 10% to a returning customer with a complaint, or spend up to R2,000 on urgent parts without checking first. Rules like these turn dozens of small questions into one conversation.
Tasks only you can do. If only the owner can quote, price or handle certain clients, those skills need to be taught, gradually, to someone else. Start with the most frequent and least risky.
[Infographic placement] Why the phone keeps ringing. Three columns. Only I know it → Write it down (shared client notes, password manager, how-to guides). Only I decide it → Set decision rules (“up to 10% discount”, “up to R2,000 on parts”). Only I can do it → Teach it (shadowing, then supervised, then independent). Caption: Value Builder data suggests businesses less dependent on their owner attract higher offers.
Start with a fortnight of questions
You don’t need a holiday to find your bottlenecks. For the next two weeks, keep a simple log of every question or request that comes to you because nobody else could deal with it. Note whether it was about information, a decision or a task. At the end of the fortnight, the most frequent items are your priorities: the things to write down, the rules to set and the skills to pass on.
This can feel uncomfortable for owners who built the business on personal service. Customers may have chosen you precisely because they deal with you. That doesn’t have to change overnight. But a business where the owner chooses to be involved is very different from one where the owner has no choice.
A few questions can help:
- What questions does the team ask us most often?
- Which decisions could someone else make if they had clear limits?
- What information exists only in our head?
- Could the business run well for two weeks if we were unreachable?
Which brings us back to the landscaper on his sun lounger, phone in hand. Every one of those eleven calls was a small gift of information about what his business needs. Writing down the client notes, setting a discount rule and labelling the keys would take an afternoon. Next year, he might even finish a book.
Sources
- The Value Builder System, “What a Study of 14,000 Businesses Reveals About How You Should Not Be Spending Your Time”, republished by FCBB. Source of the 2.93 versus 4.49 multiples. Related Value Builder articles report that businesses able to run without their owner for three months are more likely to receive offers.
