STEP ONE: Open your eyes to the big picture. Prepare for the next part of your life!

Failing to start with the end in mind is one of the most common errors business owners make. When we ask a start-up owner “so how and when will you exit the business?” we get some very strange looks.

But, a clear vision of the exit pathway helps shape the business model, gets the processes documented, guides your staff selection, and ensures the company identity is separate from your personal identity. For example, it is much harder to sell a business that is your name – “Fred’s Plumbing” is YOU! And you certainly don’t want to have to change the name just before the sale and lose the goodwill you’ve built up over years – devaluing the business in the process!

Starting with the end in mind ensures you delegate, groom your second line of management and build an automated business – one that can run without you.

Working with the end game in mind, you will have:

  • tidy and up-to-date shareholders agreements
  • simple and up-to-date accounts
  • a robust marketing plan for the future
  • identified the next products and services to develop
  • an outline plan for how to take new products and services to market
  • all your agency and distributor agreements will be up-to-date and fully transferable.

In short – starting with the end in mind gives you the best possible capital return and along the way improves profitability and ease of management, making life easier.

STEP 2: Good managers and business owners set good boundaries

A great number of New Zealand SME owners and managers have come off the tools and into business ownership without stopping to change hats from employee to employer.

The result is often blurred or non-existent boundaries, poor staff performance and in the worst cases, personal grievance payouts.

Learning to set clear boundaries with staff is essential – be consistent, clear, and fair.

Don’t play “favourites and scapegoats” no matter how tempting it is. Don’t gripe about any staff member to other employees. Be clear in your expectations of high performance and use a simple but robust performance appraisal system that is objective, regularly applied, and religiously followed up.

Lead by example – if your staff see you making free and easy with the company’s stock and assets, they will too!

Ensure there are consequences for poor behaviour or performance – don’t just let it ride. The other staff are watching and taking notes!

There also must be consequences for good performance. We’d always recommend non-cash rewards, but do make sure you give a genuine acknowledgement for good work. Suggestions could include movie passes, dinner vouchers, mystery weekends, long weekend bonus leave, or whatever works in your business and industry.

Good fences make good neighbours, and good boundaries make for happy, productive workplaces! Don’t trespass over those boundaries and don’t let your staff trespass either. Your life will be a lot easier.