Are you running your business? Or is your business running you? Here are some tips to get you back on the right side…
Business growth and development
In the early days of setting up my first home-based business, I was very concerned with setting up the business, using a small amount of capital wisely, reducing risks and making the effort to sell my services.
After a couple of years I found myself being run by the business and feeling that there was never enough time for my own interests outside work.
If you are beginning to have some of the same feelings, maybe it’s time to investigate alternative paths for business growth and development. There is always a reason to delay making difficult choices and planning for a major change in one’s life, but the sooner you start to consider selling or shifting the business out from the family home, the sooner other options become obvious.
These options are:
- Identify the drivers of business development that can be managed and supervised by other people.
- Set up the business for expansion or exit.
- Establish the intellectual property and skills in demand to manage and sustain the profitability of the business.
- Prepare to sell the business as a going concern.
A meeting between the board of directors, the advisory board and key family members should be scheduled within six months of the decision to move beyond a home-based business to a fully-structured family business external to the home.
In making this decision, consider the skills and commitments that must be covered in the short and longer term.
It is important to be clear about your own personal situation, the way in which the business has been growing, the interests of other family members engaged in or investing in the business, and of course the interests of any contractors or employees that you have engaged in the growth of the company.
Resist the natural tendency to want to retain the independence and control that was associated with the success of the solo operations of the home-based business.
At the meeting with your home business’s stakeholders, it is important to document the expectations about future directions of the enterprise and record the goals and objectives of the various family and non-family members in respect of:
- Wealth creation and benefits to be derived from business success, including share of distribution and family ownership structures.
- Customer satisfaction directions and desired market segments; remember the business of business is creating customers.
- Business, marketing and operational plans for growth; think about how big you want to be and how you’re going to get there.
- Investment requirements and securitisation of required capital – for the home-based business operator this usually means your house is your nest egg and security for the business.
- Management of surplus cashflow and provision for debt reduction – especially with the likely US recession and the flow-on effects of the sub-prime crisis into Australian business markets and consumer confidence.
- Terms of engagement for employees, contractors and consultants making sure all agreements are fair and equitable to enable you to drive business success.
- Dispute resolution and management of conflicts of interest to avoid energy draining crises and resource depleting court cases.
- Intellectual property and intellectual capital protection to protect and maintain the value of your business, including registering business names, trademarks, patents and building your brand.
- Risk management, insurance and occupational health and safety – conduct a New Year’s risk audit, develop disaster management plans – including biggies like total hard disk and back up failure, virus and personal risks. My insurance agent has talked to me about keyperson insurance and risks of doing business in some countries – hostage risk insurance. May be a better plan to reach out to safer countries first?
- Succession, retirement and estate planning for the family business including really thinking about who’s going to take over after you’ve moved on to playing more golf or tennis and doing that drive around Australia.
Once these policies and procedures are developed, allocate roles and responsibilities within the family business and then set aside some personal time or plan a holiday and make sure that your team knows that you trust them to keep things on track (you can leave your mobile on if you feel a little insecure about your baby).
Dr Jane Shelton not only runs a business from home but is doing business research into people working from home. She is managing director of Marshall Place Associates, Melbourne’s independent think tank, and CEO (honourary) for ‘Life. Be in it.’ International. Shelton has a Doctorate in Business Administration at the Australian Graduate School of Entrepreneurship (AGSE) at Swinburne University of Technology after a Master of Arts in Public Policy at Melbourne University and a Bachelor of Business in banking and finance at Monash University.
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