What is the Ideal Business Organization?
A business owner (s) cannot sell her or his business with themself in it. Like the sell of a car or home. Wait!!! The buyer has to perceive this to get maximum dollar for the business. From the picture above you could visualize how a business owner must move out to an “ideal business organization” (Owner working on the business and not in it) at the time of the sale for maximum value. How close is your business to an absentee run business?
While maximizing a business value for more equity to leverage the owner of a business usually controls most of what is going on at first to her or his advantage. But as time goes on and sales come in things change. She or he cannot do it alone and the team starts to grow (Cannot have business value alone). Then employees are empowered, teams are formed, processes emerge and the big picture of building business value is on the radar. That is why moving toward the ideal business organization starts now.
As the team grows revenue begins to be dispersed, while roles and responsibilities change. Whether you are in a partnership, family business, or proprietorship, finding the “right” person could be one of the most difficult tasks to encounter as an “Owner”. Especially, if you want maximum dollars from your business, then moving towards an “ideal business organization”.
When the Owner starts moving towards working on the business and not in it, then the business value goes up sometimes. During this culture change, a Business Owner could lose value or make it depending on compensation, roles, and responsibilities and other strategic factors. This is one of the most difficult changes a Business Owner(s) or HR manager participates in, yet is rarely looked at through the eyes of business value.
Read the example in the book “14 Immutable Laws of Business Value” pg. 12., of how the business value was increased by $100,000s with one move closer to an “ideal business organization”. To get more insight into how making the “right” organizational move could bring more business value ask one of our Business Value Experts for an online complimentary review.