How To Build a Business That Runs Without You

The number one reason people start a business is freedom, the freedom to make an impact, the freedom to make more money, and to control their time. But when they're 2 years in working 16-hour days, you know you don't have freedom because your business cannot run without you. And I've worked with so many business owners who face this exact problem and don't know what to do next.

So these are the five steps you need to do in order to build or exit a business that successfully runs without you. Step one, and this is the one no one wants to say out loud, you have to admit that your business [music] has a problem. You see, most founders build something impressive, but then they become the thing that the business can't function without.

The Exit Planning Institute found that 80% of businesses listed for sale never sell because the business is too dependent on the owner. You might be thinking, "Oh, that's not me. " But let's look at some examples of daily operations.

You're the one who knows the passwords. [music] You're the one who the big clients want to speak to. You're the one approving every hire, reviewing every proposal, signing off on decisions nobody else feels confident making on their own.

If you're doing even some of those things every day, you are the problem. You're the bottleneck in your business. I realized that I was this bottleneck last year.

>> [music] >> I felt like I needed to have such tight control over our operations that I had built an environment [music] where I was spending energy watching my back instead of looking forward. I had people around me that I felt I needed to be defensive around rather than being able to trust a team in order to take new opportunities and actually run with them. That defensive feeling was the tell.

When you're in protection mode versus growth mode, the whole business slows down because [music] everything is running through you. It wasn't because my team wasn't capable, it was because [music] I had built a structure where capable people couldn't fully step up. Once I saw that clearly, the fix was very obvious.

[music] The moment I did, everything changed. It was the single best decision that I made last year. And here's what that actually means for the valuation of your business that you have spent years building.

>> [music] >> It's worth exactly what someone would pay for it without you in it. So if you ask yourself what your business is worth without you being a part of it, how much is it worth? If the answer is not much because the whole thing burns down, this is another signal that you have a you problem.

And we see this problem across so many businesses, large and small. Steve Jobs was fired from Apple in 1985, and the company ran for over a decade without him. Not brilliantly, but it functioned.

When he returned in 1997, he didn't come back to be [music] in every room like he was before. He built up a leadership team that could execute independently from him. And then Apple became the most valuable company in the world because Steve [music] Jobs spent his time after he returned to build a company that could carry out the vision without requiring him to physically be present for every decision.

An article from BizBuySell shared that high owner dependency can negatively impact a successful business value, and that prospective buyers or investors perceive [music] higher owner dependency as a risk factor, which absolutely lowers the business's attractiveness and marketability. Think about it from a buyer's standpoint. If they're buying your business and you get a check and you get to walk away, but it's still dependent upon you, your business is not that valuable.

So, how do you implement infrastructure? The instinct most founders have is to work harder and longer, but that's exactly backwards. If your business [music] can survive a week without you, the answer isn't to never take a week off.

The answer is to find what breaks when you're not there and to fix it. [music] The thing that you get nervous about or anxious about if you were to walk away from your business and take a vacation, those are the things that are broken. And you have to understand that you won't scale past your own capacity.

The ceiling on your business is literally the ceiling on what you personally can manage, can decide, and can produce. So, if the business can run without you, then there's no ceiling cuz you can always hire more people. For each of the items that are dependent upon you, ask yourself these three things.

Is this a documentation problem where no one knows how it works? Is this a trust problem where you haven't let anyone else own it, or is it a people problem where you don't actually have the right person in place? Diagnosis tells you exactly what to fix first.

Step two, build your exit strategy on day one. Most founders treat exit planning as if it's something to figure out years down the road when they're already tired or ready for something new. That is completely backwards.

An exit strategy isn't about selling. It's about building the business from the start so that it actually can be sold. I watched this in practice when my husband sold his business for $150 million.

He built Autage Group from nothing. There was no outside capital. And what most people don't understand about a successful exit at that level is the exit was planned from the start.

The systems, the financials, the leadership team, the client relationships, all of it was deliberately transferable. So, when we started building our business, that's the standard that we held with every decision. Every system installed, every hire made, every process in place, it was built around one question.

Would this still work if we weren't in the business? [music] And you'll see this deliberate decision more and more when you analyze bigger businesses. Warren Buffett famously looks for business that could be run by a ham sandwich.

What that means is that the value [music] lives in the system, in the brand, in the market positioning, not in anyone person's daily calendar. The businesses Berkshire Hathaway buys are the ones where the operator made themselves replaceable. [music] The average business owner spends 25 years or more building their company.

For most, [music] it represents 80 to 90% of their net worth. And the vast majority will get far [music] less than it's worth because they never built it to be transferable. But, the exit isn't a one-day event.

You don't just wake up one day and decide to sell your business. It's a 10-year infrastructure project that starts now. Step three, get every process out of your head.

[music] Most founders are carrying 10 to 20 critical processes in their memory alone. How to onboard a client, how to price a deal, how to handle a complaint. If you get sick or take a vacation, or have a rough month, those processes break the entire system, [music] and your team sits around waiting for you to come back because they were never actually taught how it works.

One of the processes I had to get out of my head was teaching my team how to run recurring meetings. You see, recurring meetings are different than one-off meetings. Recurring meetings create structure for a team.

How you start the day, how you end the day, how your team members get on the same page with each other, how they get in contact with you, [music] how they brainstorm different ideas, or work collaboratively. These are recurring meetings that should be part of your team's workflow. But, my team was struggling because they were in so many one-off meetings and felt like they were firefighting because I had never taught them how they create this team meeting structure.

But, when they first told me they were overwhelmed, my instinct was to tell them, "You need to get better at meetings. " But, that [music] is about as useful as telling somebody to be smarter. So, I built something that we now call the Recurring Meeting Matrix.

Every leader had to define four things for every recurring meeting they ran: the attendees, the purpose, the outcomes, and the projected outlook. We run a daily leadership stand-up [music] that's 15 minutes long. People were walking in with topics that needed a full hour-long deep [music] dive because nobody had defined what that meeting was actually for.

But, once we set the projected outlook to clearly state, "This meeting is for critical issues regarding the next two weeks, not threats [music] two years out," the entire dynamic shifted. This allowed the teams to have a consistent structure, [music] and for their team members to know what types of topics to talk about when. This is the difference between giving people a rule and giving people [music] a system.

Ray Dalio, the man who built the world's largest hedge fund, implemented [music] this obsessively because he knew the importance of keeping the knowledge in the system. An unchecked thought amongst founders [music] is that keeping knowledge in their heads makes them essential. But, Dalio made himself less essential on purpose [music] and built a hundred twenty billion dollar fund in the process because the most common reason that founders avoid documentation is that they think it means a forty page long SOP that nobody will ever actually open.

That is not what this is. The enemy of documentation is not complexity. It's the belief [music] that it has to be perfect before it's useful.

So here's how to implement this. Start with screen recording. Record yourself doing [music] everything.

All of the things that make you great at what you do, you do it while you are video rating yourself doing [music] it. Then you save it somewhere that the team can find it and that becomes your SOP. It didn't take an additional step because you already were doing the work.

Now you just have a log of exactly how you did it. Step four, use short absences to stress [music] test the business. When you're running your business every day and finally take a vacation, every problem that surfaces when you're absent was actually always [music] there.

You were just masking it by being available to fix it around the clock. So when you step away, what breaks is what depends on you. And this has been my reality over the last two quarters.

[music] I've been less involved in day-to-day operations because I'm working on longer term strategic work. And at [music] first, stepping back felt genuinely uncomfortable. I had spent years being the person in the room for every decision at every leadership team meeting, making sure every agenda item was reviewed and every metric was top of mind.

And I was certain that something could slip up. [music] But the opposite is actually what happened. We had our best quarter in the history of the company.

Now, this is a strange experience, but that's the whole point. The systems have to work. The team has to work.

The people that I've spent years working alongside stepped [music] up and they just needed me to get out of the way. A 2022 article from Forbes shared 20 reasons why it's important for founders and CEOs to take a vacation. And one of these reasons was that stepping away exposes gaps.

[music] It shows you who you can trust and it reveals what might work differently or better. But stepping away from the business and being able to look at my role from an outside perspective helps me make the business better. [music] So, how do you implement this vacation policy correctly?

Put a 5-day absence on the calendar in the next 90 days. Give your [music] team explicit authority to make decisions while you're out. Step five, hire people who make decisions without you.

When you are solely required to make or approve every decision, there [music] is a pattern that you might start to see. A line of people outside your office rather than a team sitting at their desk working. [music] A list of phone calls that you have to make on your way home from work because your team members need you to answer their questions.

A string of Slack messages, text [music] messages, and emails all asking for your review and approval on {quote} important items. What most business owners struggle with is that there is a real difference between hiring someone to execute [music] tasks and hiring someone to own outcomes. Task executors need you to tell them what to do next.

Outcome owners figure it [music] out and bring you a solution, not the problem. The transition from founder-led to system-led requires the second type of person. I used to have a guy who worked for me that would ask my permission for [music] everything.

When he started, he came to me non-stop. Permission to make a call, approval on decisions he was completely capable of making on his own. Today, he's leading one of our fastest-growing departments, [music] but he didn't get there by accident.

He was put into growth and development roles over and over and I had [music] the most direct conversations with him along the way. The honest ones where I said things like, "You can do this. Stop asking me.

" This transformation didn't happen because I stepped back. [music] It happened because I made it a deliberate choice to have him step up even when he was incredibly uncomfortable. Watching him transform has been one of the most rewarding parts of building this company.

Jeff Bezos built Amazon around a principle he called "disagree and commit. " If a leader on his team makes a case and Bezos disagrees with the direction, he doesn't overrule them. He says, "I disagree, but I commit to supporting your decision.

" [music] That philosophy only works if you're genuinely willing to let people make calls you wouldn't have made yourself. Speed and founder ego can't exist in the same organization. At some point, you have to pick one.

And it feels uncomfortable as a founder [music] to just give up decision-making power at first. But what's happening on a deeper level here is once you do relinquish control to your team members, [music] you are making the business theirs as much as it's yours. And that ownership improves the results.

It is the single best way to make a team member feel cared for and actually [music] care about the business. It gives them a good reason to feel like they're a part of the business's decision. Those were the five steps you need to follow in order to start, build, or exit a business that successfully runs [music] without you.

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