Rem Oculee is the founder and CEO of 9Q Ventures and Confidence Wealth Management. He also wrote the upcoming book, The Exit Mindset.
If you’re like most business owners, you dream of building a sustainable, scalable company that generates revenue and allows you freedom. Seeing that dream become reality is absolutely possible and can be achieved with what I call the exit mindset.
When you have an exit mindset, you build your business around one goal: to create a company that is so desirable that buyers will pay top dollar for it, but that runs so smoothly you don’t want to exit.
One of the most important steps to achieve this goal (and one that I describe in great detail in my book, The Exit Mindset) is building the right infrastructure.
So, how do you create an infrastructure that increases your company’s value and sets it up to be (almost) self-running? The answer to that question starts with what I call the SLPP model: systems, location, people, process.
Start With Systems
Let’s start with systems. Essentially, these are the parts of your company that perform a function. Systems can include a wide variety of things, including your technology, your departments, your divisions and your teams.
What systems do you have in place? Are they lacking in any way? What do you need to do to create viable systems to achieve each task? These are the sort of broad questions you must ask yourself when you’re working to build and develop a strong infrastructure.
Location Matters
Of course, systems don’t operate in a vacuum; they must have a location. Remember, your goal is to build an infrastructure that is highly attractive to buyers, because that is the kind of infrastructure that can lead to scalability, profitability and freedom. A big part of that is making sure your company’s location—be it physical or virtual—is optimal.
If you produce products at a factory, is that factory located in a place with a large potential workforce? If you sell services, are you in a geographic market with a sustainable customer base? These kinds of considerations are important to buyers, and they should be important to you. So, from time to time, ask yourself if you are in the right location. If you aren’t, what changes do you need to make to optimize your location?
Focus On Processes And People
As important as systems and location are, they can’t stand on their own. In order to work, they must be combined with processes. Processes are key to creating the output of any given system. But, to be effective, processes must create consistent results. In other words, if you have a system that is intended to build a particular widget, your process must ensure that every single widget produced by that system is identical. If it isn’t, you have an inefficient process and, therefore, an inefficient infrastructure.
Buyers of your business want streamlined processes that make it easy for them to take over without wasting a lot of time ramping up. If your processes are a mess, not only will it decrease your company’s value among prospective buyers, but it can also lead to wasted time, energy and money as you attempt to compensate for the poor processes. In The Exit Mindset, I call these phantom losses—and they’re something you should avoid at all costs.
Processes start with you. You must take the time to create processes around every single system. With everything you have to do, it’s tempting to put this off, but that’s a mistake. Carving out time to develop processes and ensuring the outputs from one process lead seamlessly to the next will maximize your efficiency and, ultimately, your productivity.
The final key to a strong infrastructure is people. To build a seamless, high-value company, you should have human innovation and human leadership. At the same time, you can’t depend on any one person to get key tasks done, as that can lead to an unstable infrastructure.
To build a strong people pillar, start by examining your culture. Then, think about your hiring standards. Do they ensure you’re getting the right people to support your infrastructure? Finally, consider what support you need to give your people to ensure they can keep your systems and processes moving forward. Make any changes necessary to bolster this pillar.
Fill The Gaps
Building a strong infrastructure is crucial to creating a scalable, efficient, profitable company. So, to recap: consider your systems. Take a wide view of your business, dissect each part, and determine whether it is running optimally. If any system is missing elements that would increase its effectiveness, get to work!
Next, think about your location. Ask yourself if your current location is creating maximum scale. Would a buyer of your business answer that question in the affirmative? Remember, what would appeal to a buyer of your business is usually good for the business (whether or not you sell).
Third, think about your processes. Write them all down, test each one and look for any gaps. Do you have any processes that lead to inconsistent outcomes? Identify solutions to fix them, then test those solutions. Keep iterating until your processes are optimal.
Finally, consider your people. Do you have enough people to run your systems and processes? And, will your people help you scale and grow, or do they hold you back in some way? Depending on your answers, you may need to change your hiring strategies or reconsider your culture.
Creating a strong infrastructure isn’t always easy. However, if you build around these four pillars, you can create a business that is sustainable, profitable, offers you comfort and freedom, and can lead to a strong exit if and when you decide it’s time.
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