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I agree. You hit them. The core point is to cut systems, definitely. But also I think is so someone buying a company would like to carb low man risk so that which is linked to systems. But even beyond that, it means that not only are systems in place to keep the company running, but that the company can run without you or without the founders, or that if something happened to one funder, to a CTO, to a CEO, to anyone, the company will be sold. So in good shape. So a way to mitigate that keyman risk is to have proper documentation for some. So if you have well-documented your I.T., so your technology or your processes or your are aware how to do stuff or. Yes. So if you have that not only documented, but you have more than one people that’s knowledgeable on any topic. There’s like at least two people then not only is easier to delegate. It’s easier to hire and train more efficiently, but it’s also scalable and then transferable. Then if you’re selling a business where it’s that it’s well documented what to do, that it can run without the founders, that’s siloed business.
Yeah, I and there’s a very good book that I would recommend on this topic, which is built to sell by a guy called John Warrilow. And he also she has a podcast built to sell podcasts. The podcast itself is. The key learnings are really in the book, like the podcast sort of illustrates some parts of it. But I would say definitely, definitely the book is a very short book. It’s not you know, it’s not hard read or difficult raders. There’s a formal signal and there is noise, which isn’t always the case with business books. You know, you feel like Nestle putting out two or three key points to like 300 pages. But this book is very much not like I can thoroughly recommend it. And yeah, it’s that you hit some two really important points. There is one and these things are important in growing and running your business anyway. Right. So the fundamental underlying point is, is that if you structure your company to be good and easy to sell, then what you’ve actually done is you’ve structured a very good, well running company. So by by going through that process, you’re giving yourself great optionality, because not only have you got now an asset, which was is an easy or better sell than it was previously, but you’ve actually come out of it with a better operating company and something that’s likely to be able to grow more easily and is more investable and or any of those kind of outcomes that you’re looking for. And, yeah, I, I completely agree with what you’re saying there. So it’s, you know. Systems and delegation having team, you know, having teams which actually carry out the day to day business of the company, having a management team and a management processes in place that doesn’t need a heavy handed sort of top down decision making from you as the sort of CEO or whatever you want to call yourself, that. In actual fact, there is like a management team in place which can take those more strategic decisions correctly and in the right sort of direction for you as a business so that you are you are fundamentally overtime becoming more and more of an owner rather than an operator. And that is, again, I’m not sure there’s another classic sort of entrepreneurial aphorism. I’m not sure you said at first, but it’s like make sure you try and work on the business rather than in the business so that, you know, you are you are building the thing. The business is a machine and you’re the one with a spanner building the machine that is the business. And then the business cranks away and generates the product or service or whatever it is which generates the profit. Right. And you don’t want to be a Cogan’s internal inside that machine. You want to be the engineer on the outside. So tinkering away and doing whatever. Now, you can’t start like that. You have to you have to be at the coalface. You have to be doing operations in the early days. But you want to always be looking to see you. Okay. Well, how how do I systemise? How to automate. How do I take myself out and above this and get this to work? How do I get other people to do that? And exactly as you said. So that’s the key man risk. You know, if you’re sitting there and it really doesn’t matter whether you turn up like week to week in the office, then you’re in a perfect position because you’ll bet you’re able to hand over to whoever the purchaser is, a really nicely tied up little package or something, which they can just we’ll just sit and run. And once they pay for it, then it’s theirs and it’s up to them whether they want to integrate it or whether they into their current business or whether they want to leave it sitting and working away. And also, that’s more valuable, like the less hassle that a company has when they purchase something, the more the higher valuation you are likely to to get out from it. But from you personally, you’ve got this nicely sort of pairing wiring machine that’s going away in the background. And yet, like automation, delegation systems, documentation, so not only like standard operating procedures, like how various business functions happen within the business, but also good financial documentation. So having a history of your finances, you know, you’re going to be out. That’s what people who are gonna buy your business are going to be interested in. It’s like accurate accounts for the last three years. That said, well, that’s something that you should want to need anyway, because that’s important for your strategic decision making within the business. Right. You don’t want to be like how much money we got the bank buy today. Let’s go and crack open the piggy bank and see how many coins sold out that, you know, you can’t be sort of taking good business decisions on that basis. So, yeah, I would I would thoroughly recommend that book. I mean, it’s it does go over some sort of it’s all common sense. I like good advice. Tends to be common sense, but it it helps to have it packaged up and presented to you in a nice, easy to digest way just so you can sort of keep on top of this kind of thing. So I would recommend that.
So some just to be also clear on wrap it up. So some, like Silicon Valley gurus, will say, oh, don’t build a business for selling it, just focus on creating value, not making money. So I think that’s bullshit. Are usually the people, the guys saying that it is worth a billion dollar plus already. So, yeah, I’ve never seen someone or maybe someone repeating that, but yeah, that doesn’t know what he’s talking about. So in real life, businesses are for profit. So and think about it on the other way. So if you don’t build a business that’s for that could be sold. Then if you want to sell it one day to do something, let’s say it’s taking you full time and you’d reached like a maximum capacity on how we structure is really been. And Don, you say it’s not saleable, so then but you want to do something else. So then what do you do with that business? You’re gonna sell it. It has value, definitely, but you’re gonna sell it. You have to extract that value that you have built over the years. So you may maybe you need to close it and you’re destroying value or are you are not yet. You’re not yielding on the value that you built or years or you would need to descale it, which is what you will take your time to, to earn less. So you will you put you in a position where you will be on a complicated position. So you will be just to match you will be priest owner of that company, basically. Which happens to a lot of people as well. So, yeah, it’s classic family businesses. But then you. To grow it, but you can’t have because you’re stuck on that. Yeah, strategy and you are really bending on that income you reach to that point. Yeah. You’ve you’ve built yourself a job, not a business. Exactly. That’s a good way to put it. So but then you can present that and then maybe that’s and maybe you are not having fun or or you want to earn more. But you have no time and then you’re really stuck. Yeah. That’s why you’re thinking on how to build it for two reasons for selling it. It’s important they will reach you. It will force you to go into other directions which are which are more professional. I would say. And where eventually you’re going to earn more money down the road. So, yeah, that will be my final conclusion. So don’t be fooled.
Now, don’t be a fool. So Mr. Tay’s advice here. Cool. All right. Thank you very much for listening. We’re back. Every Tuesday and Thursday, please cheque out our YouTube channel, which is where we post this podcast. And our other videos, you can search for net workers, which is two words, or you can find the link in the show notes. So this podcast, if you’re interested in help, mentorship and courses for Internet entrepreneurship and starting businesses, please cheque out our Web site at networkers DOT Co. See you next on. Thank you. Bye.