Build Systems To Escape The Hourly Grind
“Are you selling your business in New Zealand?”
That’s what someone asked me when I made known I was moving from New Zealand back to the Netherlands. Without hesitation, I knew the answer to that question: “No, the business is not sellable.”
It's not that I'm too proud to sell my business or that it's too valuable for the average person.
It’s because I AM the business. Without me consulting, designing or project managing, there is zero income.
You could say my customer base is worth something.
But, my customers, mainly irrigation installers, use my business because of the knowledge in my head, my experience and my skills.
Why My Business Wasn't Sellable
There were no systems set up for someone else to keep running my business if they bought it. If someone bought it, they would be so confused. I had:
- No checklists
- No company videos
- No courses to follow
- No well-designed website
- No new client onboarding system
- No SOPs (standard operating procedures)
- No brochures that explained what I do
- No own digital or tangible products to sell
- No own building with an office and meeting room
- No recognizable brand with clear values, mission and vision statements
And the list goes on.
If I look back and review the way I was working, it’s clear I spent most of my time on two things:
- Working for an hourly rate
- Doing administration work so I got paid for the work I did
These two things are crucial. Without money, it's not a business, it's a hobby.
But if I’m brutally honest with myself it’s fair to say I just did not build a solid business. I got myself an okay-paying job, without all the good perks of a job (holiday pay, guaranteed monthly pay, minimal administration work, the company is liable instead of only me, etc.).
The Key to a Valuable and Sustainable Business
I did not intentionally build my business ready to hire employees or be sold because I had no desire to do so. But I do wonder how much easier it would have been if I had designed my business to be sellable.
A business that has:
- Physical office
- Products to sell
- Professional brochures
- A well-functioning website
- A customer onboarding system
- A recognizable brand in the industry
- Standard operating procedures so someone else can learn how to do my work
- A system that consistently and quickly delivers high-quality results for the clients.
I would have benefitted from that hugely. Financially and mentally.
What would make a business more valuable, easier to manage, and appealing to customers, new employees, and potential buyers? That’s what I wanted to figure out.
My research taught me that having an ecosystem of business assets is what adds most value to your business.
In short, a business asset is anything valuable that a company owns or controls that helps it generate revenue or create future value. This includes:
- Tangible assets: Physical items like buildings, machines, tools, inventory, and cash.
- Intangible assets: Non-physical things like brands, patents, awards, and customer relationships.
Basically, an asset is anything that would still be valuable without you.
Engineering Assets
This research made me look differently at business and what I was doing every day.
I started connecting the dots. The irrigation system I was engineering for a fruit or vegetable grower is a tangible asset. It increases the value of the business of the grower because it will still provide value without the grower. An investment firm can buy a grower's business, hire an operator and use the irrigation system without involving the grower.
I now use an irrigation system as an example because I’m in that industry. But in every valuable business, there are systems in place that work towards a profitable outcome.
In my business, there were no systems in place. Now I learned this, I’m dedicating time to engineering systems for my own business. Systems that can work without my time while still providing value. Which will make it a business asset.
If I can learn to engineer business assets for a grower, I’m confident I can learn to engineer business assets for a small technical business.
Work Smarter, Not Harder
Which business assets to build and how to build them I cannot recommend yet. I don’t have the authority yet. But I’m very motivated to figure it out.
My goal is to help ambitious builders understand the importance of building systems early on in their businesses. I learned the hard way and I don't want others to make the same mistake.
If you are like me, you don’t mind working on the business. That your highest priority is not to make your business so automated you can sit on the beach the whole day in a sunny country and do nothing. That gets boring real quick.
It’s fun to work on the business. But imagine how much more enjoyable it would be if there were efficient systems in place. Systems to manage operations, onboard new clients and sell products even when you take a day off.
The best book to read on systems and assets I found is 24 Assets by Daniel Priestley. He lists out the assets to build and explains what is required to build a valuable fun business.
If you don't feel like reading a whole book, subscribe to my newsletter. I will share my learnings and insights on building and maintaining a sellable technical business.
Action Points
To build a more sellable and sustainable business, focus on these action points:
- Identify the business systems you already have
- Investigate how you can improve your existing systems and take action
- Identify the business systems you don’t have yet
- Investigate how you can create new business systems and install them
- Daily work on digital and physical products that can generate income without your time
- Read "24 Assets" by Daniel Priestley for a deep dive into systems and assets
- Regularly review and improve your business systems
Time to build and create.