Wednesday, June 9, 2021

I'm Successful, Now What?

 I've been thinking about a trade show presentation based on the Harvard Business Review article on how successful small businesses eventually reach an impasse. They have a variety of roads ahead, including selling, closing, expanding, and my favorite, the Maui Beach House. The MBH is when the owner finds a hobby to use up all that small business energy. Leave the store alone, design your beach house on Maui. This is a type of safe disengagement, at least safer than over leveraging yourself and ending up hungry in the street with your children.

Let's look at disengagement for a moment, to help understand the various stages:

1. Solo Store. You are the master of your domain. You set strategy and tactics. You might never hire staff and you might be happy doing this or it might burn you out. You may not be able to become profitable enough to get past this. Nearly every store starts as a solo store. 

2. Managed Store. You manage your store and hand out roles, so at the very least you don't burn out. You set strategy, and eventually need to give up tactics. You can't tell people what to do and how to do it, at least not if you want them to stay. Most stores mature into a managed store, rather than starting as one. If you're at a higher tier, this is your first fallback. This is where you hone your policy and procedure. This is store ownership for the vast majority of profitable store owners, and some will find anything else to be aberrant. 

3. Remote Managed. "I'm doing the job, just not here." You set the strategy, have no hands on tactical role, and you rely on a manager or two to do your bidding. You may still work long hours, just not in the business. You are in Maui with your laptop, while the kids are surfing. You can easily step back in and manage your store again, as you're intimately familiar with day to day operations. The Remote Managed store does not require as bulletproof policies and procedures as the remote owned store (below), as you're still hands on, just not present. However, it has to be strong enough to work without you physically being there. You can't sell or retire until you shore this up. I've been remotely managing my store for the last year.

4. Remote Owned. "What do you see? You don't see me." You set the strategy, you have no hands on, and you delegate all or most tasks to a manager. You are on the beach in Maui. This is as close to retired as you can get, without selling the business. I've done this for three months at a time. It requires a very good manager, and when that manager leaves, and they eventually do, you'll be rushing back to set up your Rube Goldberg machine once again. You might get lucky with succession, or you might start from scratch if you can't find the right person. The advantage of this model is when it works, you have a valuable business that anyone can run. When it doesn't work, it could be catastrophic if you weren't paying attention. 

Anyway, those are my thoughts so far. I'm sure there's a stage I'm missing. Let me know if you spot it.