Getting Ready to Grow or Sell Your Business? - Are You Wearing Too Many Hats?

By Scott Balfour

As a business owner, you are always thinking about producing income from your business, but are you also thinking about building equity in your business? At some point aren’t you going to want a payday for all the blood, sweat, tears, and years you have put into the business? To have a business worth owning? Whether it’s selling to a third party, passing down in the family, selling to your employees, or finding equity partners, when done right there are businesses that make more for the owner(s) at the sale than in salary during the total time at the helm.

The two very important things that help determine the likelihood of a “great payday/liquidly event” are cash flow (EBIDA) with good accounting and strong management and systems.

Ask yourself: are you wearing too many hats? Are you the hub of all the activity, the chief cook, and the bottle washer? When you go on vacation (you go on vacation, right?), do you check in with the business often? Do you have restless nights wondering if the business will survive if you unexpectedly become disabled or die, if your family can continue to run it, and/or at least get a good value for it? Are you watching your competitors grow at a faster pace than yourself?

If you answered ‘yes’ to any of these questions then in order to maximize the value of your company, you will want to strengthen your management team and systems.

I know that you know this. I’ve known many business owners that have known this. Yet, months slip into years, years into decades, decades into …

You also know why this happens. The reasons vary between companies but here are the major culprits:

  • Time – There just isn’t enough.
  • Money – There just isn’t enough.
  • Expertise & Trust – Delegating is difficult for entrepreneurs.


It’s true there is only so much. You need to make the most of what time there is. Sometimes the solution may be in baby steps. A good start is documenting policy and procedures. Create checklists, systems, expectations, and reporting. Deliberately cross-train so there is more than one person in the company that can do the job or tasks of others. Look for times when you can delegate so you can keep your eye on the ball and not get bogged down. When appropriate make good hires. For that matter, make good fires. Whenever you’re spending more time on someone than it would take to train someone else, termination may be the right thing to do. Some of these things never feel right at the time, but consider that the focus on the future, not the moment, that it’s a down payment for your “payday.”


Some money is spent wisely, some is wasted and some is invested. It’s important to know the difference. You know your business better than I so I’m going to leave the first two in your hands.

Let’s talk about the money that is to be invested in your business. Sometimes the money is there but the owner is more focused on short-term gratification (salary or withdrawals) than on long-term investments into the business. Sometimes the money isn’t there. That’s when it’s even more crucial to make sure you’re building the business and looking to the future rather than letting it decline. My father used to say “make sure you’re not doing a $10 job when you can have someone else do it for less.” That statement holds true today and even then it used to cause more conflict. I liked cleaning my car, but the ‘cost of doing so’ never made sense. This shows that whether it’s time or money, both need to be invested wisely.

Expertise & Trust

Yes, there are people that can do it better. Yes, there are people that you can trust. Yes, there are processes that are repetitive and can be systemized. So let’s talk about some. Advisory Boards: The fortune 500 have a Board of Directors. You can, too, often for the cost of a meal. To build a procedures manual, you and your employees should record every task done for two weeks, then collect and edit them. Wow! – now you have something to train new employees with down the road, a good investment. Look for a task or segment of the business you can outsource. Develop the expectations and contract for the result. This is done in production often but this can apply to management as well. Again the Fortune 500 has Chief Operating Officers, Chief Financial Officers, Chief Technology Officers, Production Managers, Human Resource personnel, etc.

All these functions can be outsourced, even on a limited, perhaps project basis, until the business can afford to bring them in house more efficiently. For example, there are great freelance bookkeepers, staffing companies, IT companies, and consultants that bring tremendous expertise and experience beyond what the business owner has been trained to do or experienced.

Successful entrepreneurs don’t wear all the hats – do you?

At Magnusson Balfour, we are guiding businesses, advising people, & moving property. Call us! 207-774-7715