Can Your Business SURVIVE Without YOU? - How to Build a Self-Sustaining Business

Have you ever wondered what would happen to your business if you were suddenly gone? Today, we're going to dive into a question that hit me hard. Dad, if you and mom died right now, could we run your business? My son recently asked me this.

My answer was a sobering no, they couldn't. In this video, we're going to explore why it's essential to work on your business, not in it. We'll talk about the importance of having a solid team, clear processes in place so that your business can continue to flourish, even if you're not there to steer the ship. Stick around because this could be the key to securing your legacy and ensuring your hard work lives on.

So today I wanna talk about like the stages of business as we kind of get into this. And when Dylan asked me this question, my wife and I were sitting at the dinner table and we both just kind of chuckled in almost a nervous way, right? Cause I was like, man, there's no way. Kara actually said this.

She said, I don't think I could even run our business right now. And it's these moments that we check in with questions like that. And sometimes these questions come from a mentor. Sometimes it comes from your 24 year old son.

They're super important, like check-in points for us. And, you know, this is why I love masterminds and coaching and all of that, because I can think back through my career and see these moments where somebody just asked me a question. I've realized this, that, you know, a lot of times I think people sign up for a mastermind or a coach, and they think that they're going to get like the 972 ways to, you know, transform their life or their business or whatever. And a lot of times they're there to just ask these questions that really just send you down a trajectory of searching inside yourself, searching within your business, searching within your investment portfolio, and just getting their answers that you really need.

So as we get into this, I'm going to talk about really the different stages of business and life. I want to set some context here. When I talk about succeeding or surviving without me, it could be really twofold. And I've realized this in my own life lately.

It could mean the business surviving and continuing on the way that it is without you with the existing employees, the existing management, or it could also be selling. And one of the things I've had so many conversations with entrepreneurs in the last few years where it's like, you know, they just want to sell their business because they don't want it to need them anymore. And it's really reframing our mindset. They could keep their business and put the systems, processes, and people in place and still have their business, or they could sell the business.

And one thing that I think we often miss is they're oftentimes the same outcome. So it's putting those people and processes in place that would make a buyer attracted to your business. because oftentimes what a buyer doesn't want is a small business, like a entrepreneur business or a business where that business 100% relies on the founder. But if you think about this question, you as a business owner is actually wanting the same thing.

You might not hate your business as much as you think you do. You probably are just frustrated with your business because nothing happens without you. Oftentimes as entrepreneurs, we're like, why doesn't anything get done without me? Why do I have to be in the middle of everything?

I've actually found myself asking myself this question, asking my team this question. And the reality is when we find ourself in that place, it's because we as an entrepreneur haven't spent enough time working on the business and we're just constantly in it and nothing happens without us. So again, for context, it could mean the business surviving and staying as it is and your family takes it over, or it could mean the business completely sells, but it's the same thing. So this was really interesting to me.

There's 6.1 million firms in the US, and this is a little bit outdated data, so it could be more now. This came from the SBE Council. 6.

1 million firms. So setting the stage with this, there's really three phases that I kind of want to talk about and go into today. I think phase one is the startup entrepreneur And again for context this is probably like one to 10 employees The middle ground phase which is where you really getting into scaling the business and the business could potentially survive without you that more in the phase of probably 10 to 250 employees. And I understand that that's a big gap, but as I get into this, I want to explain how I kind of came up with this.

And then finally, I think where all of us would want to get to is the pinnacle, the big business scenario where it has a CEO, you might still be the CEO of that business, but you have an executive team. You have a true CFO. You have a true operations person, a COO. You have a true executive team that has divisions, departments underneath of it.

This is where we all want to get to, but this statistic is staggering. 250 plus employees and in the United States of America, only 1% of businesses actually get there. So yes, we all want to be in the 1% and yes, we should strive for that. But I think what we have to ask ourself is like, what happens between getting here or there and what happened if I died on that journey?

And then, you know, maybe the second question is what's the real likelihood that I'm going to get to 1% and be realistic about both of those. Because even if you firmly believe that you're going to get to the 1%, there's a big gap between here and there that we need to constantly be checking in on this. So I'm going to go back to the startup entrepreneur phase. This, as I said, is probably where the most business owners are.

In fact, 78% of businesses of the 6.1 million firms, 78% of businesses in the United States fall in this one to 10 employee category. This is a really challenging time. And if you fall into this category and you ask yourself that question, you might be a little bit frustrated by it, but I want to encourage you as we're talking through this, don't get frustrated.

Just look at the reality of your situation and keep focusing on growing and scaling that business and also getting your answer to a resounding yes. So I remember as an early entrepreneur, I was in this stage and one of my mentors, his name's Barry Leporelli mentioned to me, he said, Mike, one of the things that you need to do is make sure that you get enough life insurance that if you died, your business could continue on. And he told me some very valuable lessons, which I've remembered at times and forgot, but he said, make sure that you're constantly checking in with that.

Now, this question that my son asked me is an obvious answer to the fact that I've been so busy in my business and have forgotten about this the last couple of years that I haven't been constantly checking in. And if there's one takeaway that you can learn from me is make sure that you don't do what I've been doing. We need to make sure that we're constantly checking in on this. Barry said another thing as a kind of a tail end to that comment, make sure that you're buying enough life insurance that your business carries on without you.

Or this is what he said, that your wife can pay the business debts off and have enough money to survive because you don't want her marrying the first Yehu that comes long. Now this guy's kind of in an older generation and, you know, Kara's pretty independent herself. I think she would figure it out, but the principle lies true. Make sure that you have enough life insurance in your business that the business could carry on or your family could shut the business down and they would be okay with it.

Now, one other thing that I want to just interject as I'm thinking through this, if you fall in this category, it's not only thinking about could your wife survive and take over that business as Barry was saying, but what happens if you and your wife went down in an airplane together or, you know, died in a car crash together and you're thinking about your little kids. One of the questions that Dylan asked me, could we run your business or would we need to get our grandparents involved?

And even that question, number one, grandparents, a lot of times don have any business experience They might be too old They have their life going on My kids could not run my business Do they have the potential to run it I think so But my in-laws could not run the business. They don't have the time to. And my business is pretty complex and they don't know anything about it. And so it's not even a question of whether somebody could or couldn't, but do you have the systems processes, SOPs, and the people in place that even if somebody was capable, like one of your sons or daughters, that the business would survive long enough to be able to get into that.

So the second phase is the middle ground, which scaling your business. This means you have plenty of employees. You've probably got a lot more clients. Somebody probably could step in and do your job.

What the questions that you need to be asking is like, what do you do on a daily basis? So many times, even in this zone, and I've experienced this myself as a business owner, we require all of our employees to write, you know, standard operating procedures and they have people that they're training to, you know, cover them while they're on vacation and stuff. But you know what we typically don't do as a CEO founder of a company is force ourselves to do the same thing that we're asking everybody else to do.

So it's pretty important that you start to figure out how to document that. And I'll tell you a simple process that I do in my own life. And I actually ask my team to do this. You could do this in a couple of different ways, but I take a piece of paper and I keep it with me and I divide it into three vertical columns.

And on the very left of that sheet of paper are things that I should not do. So should not do in the middle of that column or that paper, the middle column is a column that says should do. And then in the third column is things that I say I have to do. And, you know, just kind of audit your daily workflow for one or two or three weeks.

Keep that list next to you. And every time you have a new task, put it in one of those columns. This is a really good starting place to start to think about the things in your business that you have to do, that you should do, and that you shouldn't do. And one other really great thing with this, you're going to start to realize that the majority of things that you're doing fall in the have to do column.

So I've seen this so many times in my own life. And you'll realize too, that when you do this right now, and you go through this audit process, and you do it again in six months, your have to column is going to be super full. But every time you do this process, you're going to realize that the have to is when you really start analyzing it, they're going to move to the should do. And then ultimately through your thinking, and delegating these things to team members, a lot of the stuff that started in your have to do column is going to move to the should not do column.

I've seen it so many times. So the number of businesses that are in this middle ground, and this is probably 10 to 250 employees is 21% of businesses. Now I would say, um, now this might make you sad if you're, you know, less than 10 employees and you're in the entrepreneur phase, you can get to the middle ground, but it's going to be really hard for your business to survive and thrive. if you're in that zone.

The middle ground is the place where above obviously the 78% of people that are in the entrepreneur startup phase, 21% are in this middle ground. Only 1% get to big business. This is really the critical point where our business can fluctuate from, yes, it will survive without me to no, it won't. So I'm gonna keep this pretty high level at this point in time.

But what you really need to be doing at this point in time, as I've said, is just really consistently looking at Who do I need to hire? And I understand that in this middle ground, you have more flexibility to hire people than you do in the startup phase, but it's constantly looking at the efficiency in your current employees, current systems, and seeing what you can get off of you and get down to other employees. And I think if you really want to get yourself to a point when you're in this phase, it's how fast can I put together upper management teams and eventually a general manager in your business eventually a CEO in your business And by the way as a side note I was listening to My first million It a podcast that I love listening to And there was a guy on there that actually said that I think this guy owns like 48 businesses And he actually said that he has businesses that he's put a CEO in place.

And the trigger point for him was when your company is producing at least $300,000 of net income outside of what you need to live on as the owner founder, then that's probably the earliest point that you should put a CEO in place. So if you need $300,000 a year to live, and your business is producing another $300,000 a year, that's a good first point to start thinking about a CEO. So hopefully this is like helpful. And I will talk about the big business here for a second.

But I think checking in consistently on all of this, and figuring out how do I not become the bottleneck in my business is the simplest way to figure out if your business would survive without you and what areas you need to get off of your plate in order to have that actually happen. I want to be at the point of big business. I remember golfing with Chris Harder one time and he was actually talking about Elon Musk and how this guy's just like an anomaly. And I had this limiting belief at that point in time.

I made this statement. I said, well, it must be nice to not have to worry about money. Referring to Elon Musk and Tesla and you can just raise capital and do whatever. And Chris looked at me and he said, I think that sounds like a limiting belief to me.

And it caused me to pause in my tracks because I was like, you know what? He's 100% right with this. I started changing my thinking about this. And when I think about big business, it's really easy as an entrepreneur to say, well, you know what?

It's easy for you to go hire employees that are not efficient. You guys have all the money in the world. And there might be some truth to that. But I think whether you're in the entrepreneur mode that's moving to middle ground, or whether you're in middle ground that wants to move to a big business, I think we really have to pay attention to the limiting beliefs that would keep us from wishing that we could think like a big business, but we just don't have the money.

Or I just don't have skilled enough employees. I can't pay them enough. There's all these reasons that we come up with that would keep us from in the middle ground getting to a point where we have the people in place that our business would survive, or ultimately getting to the big business. So these large companies with a CEO in place, you're probably the founder, 30 to 50 million in revenue and above at least.

Having those systems process management in place is so important. And a lot of these companies obviously have board of directors. And so again, to me, this is kind of getting to the pinnacle of not having to consistently answer that question all the time would be to get into the 1%. But the reality is most of us will never get there.

And so I think as I kind of wrap this up, my big takeaway for you is pay attention to where you're currently at because it will change. If you're in the entrepreneur stage, the startup stage, just keep working toward getting to that middle ground. If you're in that middle ground, just keep checking in with yourself consistently. I would carve out, this is actually what I'm going to take away from this season that I'm in right now.

and the question that my son asked me, I'm gonna carve out two to three hours once a quarter and just focus on this question. Do I have the right employees in place? Do I have the right systems in place? Should I shut down certain departments?

Or can I team up with other partners that'll fill the gap in my business? Can I bring in a consultant that will fill a need that I have? Can I bring in a fractional CFO or a fractional CMO? I actually know a really great fractional CMO.

if you want to talk to them. It's awesome. These are the things that we need to be thinking about. So hopefully this was helpful for you.

I know it's completely transformed the way that I think about it. And honestly, this isn't the first time that I've thought about it. And my son asked the question, would it happen? And it's a resounding no.

So I think this check-in is going to be huge for us.