The purpose of this whitepaper is to provide a path to freedom, the single most important ingredient to achieving optimal work / life balance. By freedom, we mean the ability to regularly step away from your business, both physically and emotionally, to develop other aspects of your life.
It’s also important to briefly discuss what this whitepaper is not. We are not talking about how to use your personal time, how to better manage your workday or techniques to improve happiness. No – that’s entirely up to you. As you know, definitions of personal and professional success are highly personal and unique. Our focus here is the precursor to optimal work / life balance — freedom.
Ironically, if done right, creating freedom from your company will likely increase the value of your business, perhaps significantly. The more your company can operate, indeed thrive, without you, the more valuable it becomes to a purchaser. Makes sense — right? In the financial world, this is called transferable enterprise value and it can be measured fairly accurately allowing you to calculate the value created by the initiatives you undertake to free yourself from some or all of the critical aspects of your company.Unlike most employees, the daily life of an owner is typically characterized by a lack of freedom. Whether at the office or not, an owner’s mind is constantly pre-occupied with the latest client issue, product launch, marketing strategy, HR issue, etc. The fact is – owners are often tethered to their work which crowds out the development of other aspects of their lives. And, it’s the other aspects of their lives that create the “balance” in the work / life balance equation.
So, the first step to optimizing work / life balance is to create freedom while simultaneously increasing the value of your company. That’s our focus for the remainder of this article.
For many owners, the notion of freedom from your company is at best far-fetched and at worst a counterproductive myth. It stands to reason if, like most owners, your company’s success largely depends on your direct and consistent involvement, then stepping away will cause irreparable damage. You are the most effective salesperson, product / service designer and constantly must manage key accounts — no wonder, the theory and practice of freedom appear to be polar opposites. And, to further complicate matters, your net worth and family financial stability depends on the health of your company.
Wow, feeling demoralized? You’re not alone. Most owners start in the same place. They have built a successful company with their blood, sweat and tears but, now typically after years of success, they come to realize the unsustainability of their work / life imbalance. This is the owner’s dilemma and it’s not for the faint of heart.
Fortunately, there is a path forward and it rests on the inherent alignment of interest between your desire to address your work / life imbalance and your interest to increase the value of your company. In fact, this alignment is not limited to your interests alone, your family, friends, co-workers, customers — indeed all stakeholders in your life and company share this alignment. The simple truth is … the more the company depends on your unique value contribution, the more it consumes your life and the less valuable it becomes.
So, what does this mean practically? While, there’s no single path forward, there are common themes and strategies, a few of which are listed below.
|Company Dependency||Company Initiative / Value Enhancement||Work/Life Balance|
|Management Strength||Leadership – Empowered Employees – Investment perspective||Freedom|
|Accountability||Financial Performance – Key Performance Indicators||Freedom|
|Growth||Growth Mindset – Sales & Marketing Strategy & Systems||Freedom|
|Product Development||Viable Value Proposition – Sustainable Brand||Freedom|
Developing freedom from your company requires thorough planning guided by specific personal and professional objectives, followed by disciplined execution. At the end of the day, embarking on a freedom strategy will cause significant (positive) change at your company, but make no mistake, good intentions or half-hearted efforts will not get it done. Unless you are dedicated (and usually assisted by a 3rd-party outside expert), you will likely fall back into old patterns.
The above list of common company initiatives highlights a critical fact — it takes time to effectively design and implement a freedom strategy. You must not expect meaningful near-term change. Successful freedom strategies are usually a 1-3 years process depending on the unique circumstances of each owner and company. The investment (both time and capital) will likely offer the highest return on investment possible for the company and your human capital. It is clear – owners who successfully progress through the freedom stage of their company’s development maintain a higher degree of personal and professional satisfaction while significantly improving the value of their company.
How do we know progressing through the freedom stage of your company’s development significantly improves the value of your company? We rely on the Value Creation Roadmap. Used by professional investors, the Value Creation Roadmap is a market- based method of systematically improving the value of privately held, middle market companies. It enables smaller companies to evaluate return on investment profiles for discrete value enhancement initiatives.
One of the primary value drivers identified in the Value Creation Roadmap is owner dependency. You may find it surprising that lowering owner dependency likely will contribute more to the value of your company than margin growth. On average, smaller companies can increase in value by 33% through the value enhancement initiatives identified by the Value Creation Roadmap. To learn more about the Value Creation Roadmap, we have put together a separate resource entitled Why is private equity increasingly interested in smaller private companies?
To begin the process, an owner must assess and prioritize company initiatives around value drivers that maximize transferable enterprise value within the context of the owner’s desire to create freedom. Here’s the critical piece, given the complexity and diversity of company and personal factors, it is imperative that you assemble an advisory team of specialists capable of achieving your unique combination of business and personal objectives. There’s no such thing as a standard plan or team, but there are processes you need to follow starting with a formal company assessment optimally conducted by a specialized professional familiar with the process.. To learn more about the “getting started” process, we have put together a separate resource entitled Building the Right Advisory Board.
The first step to optimizing work / life balance is creating freedom from your company. Freedom means the ability to regularly step away from your business, both physically and emotionally, to develop other aspects of your life. Creating freedom from your company is a deliberate process which substantially improves the value of your company. With the right advisory team and the right plan, it is possible achieve both objectives simultaneously.
Birkdale Transition Partners LLC is the objective source for those seeking business sustainability, growth or considering a business transition. Our goal is to ensure business sustainability and to maximize the value of an enterprise before any transition or transaction. Business owners without a transition plan often are unable to sell or transfer their company at its highest value. We help them to balance a company transition with the owner’s personal goals. Then we work with them to avoid problems caused by the lack of planning and/or not recognizing what needs to be added, corrected or modified before then.
Birkdale is unique because it only offers an unbiased assessment and solutions for the company owner. We do not sell any other products or services, so are a fee-only firm. We work in partnership with the company’s current professional advisors and staff. Because we help companies increase their monetary value, owners view our assistance as an investment—with payback and payout occurring during and at the conclusion of an engagement.
For a no-obligation, confidential discussion of your situation, please contact Barry Goodman at 312-626-1820 or contact us.
Click below to download the PDF: