Founder led or Owner operated?

Which do you prefer and what’s the difference?

A common and interesting conversation amongst the professional advisor community is about the one single issue or opportunity that a business owner can address to improve their situation, almost regardless of the objective.

How about we refer to these businesses as Founder – or Owner reliant?

There, that makes it easier!

It is truly about the reliance an enterprise might have on one or a small number of people.  Go through the process of addressing this and you will “fix” most other issues you might come across.

A small business that is not reliant on its key financial stakeholder will almost certainly be all or many of the following:

  1. More profitable
  2. More resilient
  3. More likely to grow, and faster
  4. More valuable AND more saleable (the difference is another topic entirely!)
  5. Uninhibited by the bandwidth or mindset of one individual

In turn the owner(s) will have a better work/life balance, probably earn more and will almost certainly have more choices about how they deal with this (probably) significant asset.

Importantly, this is about positive choices:

  1. Go genuinely part time
  2. Do the bits you really enjoy and / or add value
  3. Treat it as a genuine investment, maybe a long term annuity type income generator
  4. Have a living legacy for your family
  5. Sell it for more, and under better terms, when you want to (not when you need to!)

As always, good luck with everything, stay safe and if we can help in any way we’re happy to do so.

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Published On: February 11th, 2021 / Categories: Business, finance /