One tricky aspect of growing our businesses is that at some point we can’t be there as much as we like.
Whether you are a business owner or leader, if you desire to be away from your business you need systems to keep it running while you aren’t there. You might want to be away from the business to prepare for retirement, to explore expansion possibilities, to travel for fun, to be with your family or for a host of other reasons.
Regardless of your “why” you want your business to be there – and in good shape – when you get back.
The good news is there are a number of things you can do to make that a reality.
And most of these solutions are reasonable to implement and add benefits beyond just protecting your business while you are away.
#1 – Install A Board Or Oversight System
You need someone, other than yourself, to oversee your business.
It has to be someone you trust.
And you want to minimize risk.
When my clients are looking for the answer to this I often tell them to get a board of directors. Even if they are only selling a few million dollars a year (or, even, quickly headed there). Even if they are an LLC (despite the bad guidance out there I have yet to see a single state that an LLC couldn’t have a board with the right LLC Agreement).
A board is so unique in that power is invested in multiple people. And, barring a catastrophe striking down multiple directors at one time, a board keeps going and going so your business has continuity.
And don’t worry – if you are the business owner or leader – the board can be set up in such a way you keep final decision making while you are around.
The continuity of management and authority will give you so much freedom.
#2 – Have A Whistleblower System That Works
Periodically we see stories about whistleblowers. They can steal our headlines.
But there are reasons whistleblowers are so important to controlling our businesses.
Traditionally our businesses are run with a top-down management culture.
It’s very traditional and it can be very efficient. But it means everyone answers to their boss above them. One bad man, woman or other in your management structure and you’ll find that folks lower in the chain may be strong-armed into doing things bad for the business.
A good whistleblower system knows this can happen and gives the person an “out”.
Build those out so you can know what’s happening. You don’t want one bad link killing the business you built.
#3 – Separate Duties
It’s Accounting 201 but you want to separate (often called segregate) duties in your business.
This is easier in theory than in reality, especially in growing businesses.
As businesses grow there is often a tradition of everyone doing everything – as required – as the business grows. Priorities shift and businesses have to react.
But as you grow you need to go back to basics and make sure duties are separated by job functions. This flows into approval, authorization and data access.
For instance if one employee is approving invoices a second employee should be checking the authorization paperwork and cutting checks.
If one employee is setting up new customers a different employee should be invoicing those customers.
Usually it requires an audit and an accounting profession to come in to get this right. But it can be money well spent.
Not only will you avoid the potential for fraud and loss but you will also set the culture and communicate that you are keeping an eye on things (without being a micromanager).
#4 – Duplicate Knowledge In Appropriate Ways
Ever have an employee leave your business that knows things no one else does?
Yep! We all have.
And you know what, it sucks!
But what we really want is to have that knowledge in our business, not any one employee.
That means having multiple employees in know. It means a good system for documenting process and status of accounts.
Set-up your business so no one employee can hurt you too bad.
#5 – Install Checks And Balances
You’ll also want to have checks and balances within your business. This means thinking about who does what and when things need additional approval.
Part of this is segregating duties as we discussed before.
But part of this is also making sure that employee authority is limited in appropriate ways. Ask the question how much can each employee do without talking to someone else?
Buying $50 in office supplies once a month? No brainer, any employee can.
Sending a $100,000 check to a supplier? You probably want a second employee to sign-off.
Your business needs to be evaluated by appropriate professionals to make sure the right checks and balances are there to make sure no one employee can hurt you too bad with bad decisions or fraud.
#6 – Make Your Employees Take Time Off
Having your employees take time off – within limits – is often good for your business.
Some businesses are actually paying employees to take vacation.
You don’t have to go that far. But you do want your employees taking time off.
If an employee is doing too much, controlling too much information or committing fraud you’ll know if they take enough time off.
It’s hard to cover your tracks when you aren’t there. And other employees have to step-up and fill roles.
It’s smart money to make sure your employees take your time away so you can see your business keep going.
#7 – Think About Audits
We’ve mentioned a few times in this article about getting outside professional advice on the structure of your systems. Do that.
You’ll want to have your current systems audited, from time to bottom, periodically to make sure your systems are safe.
You’ll also want someone to come in and audit how the systems you have installed are working.
A good audit will expose problems, allow you to correct them, and avoid problems before they happen.
What To Do Now
Get your board of directors together [LINK] and think about how you can protect your business.
These are big discussions and they will take time. But they are doable.
The biggest concept to embrace is that controls are needed and it can be done without overwhelming you.
You worked hard to build your business. Now it’s time to protect it.
LET’S DO MORE: If you are a business owner or leader let’s be in touch more. I’d love for you to read my online work and give me your honest feedback: join my mailing list, follow me on LinkedIn and jump into my Facebook Group.
NOTE: This article is a piece develop a small portion of the content of the book tentatively called The Journey: Finding Your Place From Entrepreneur to CEO being co-authored by The Our Shawn McBride and Ann Gatty. If you want updates on the book including the possibility of joining our release team or getting one of the first copies please join our mailing list here.
DISCLAIMER: This article talks about legal issues. I am a lawyer licensed in multiple US jurisdictions, but I am not your lawyer unless we have signed an engagement agreement. Please view this material as educational and general in nature (as it is). Consult counsel you have retained for advice on your specific facts and circumstances and applicable laws. Do not rely on the statements in this article as legal advice.
By: The Our Shawn McBride, is the business nerd and long-time business attorney that focuses on changes of ownership in businesses. He works with business owners that know their business is about more than themselves to get ready for their future through keynotes, training and personalized solutions. In furtherance of this he hosts The Future Done Right(TM) Show where he collects, digests and gives lessons and insights on The Future of Business. If you want regular content on the future of business subscribe to get new blog posts from us here.
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The Our Shawn is based in DeLand, Florida (between Orlando, Florida and Daytona Beach, Florida) and Dallas, Texas where he keeps offices. You can also find Shawn on webinars or traveling nationally or internationally for speaking engagements.
Check me out at: www.planningdoneright.com
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