In the world of business ownership, it’s important to assess your role within your company. Are you at the top of an organizational chart, overseeing a well-structured team, or are you stuck in the middle, acting as the hub of your business’s operations? The hub-and-spoke model can be risky, as the entire system can collapse if the hub (you) becomes overwhelmed. Potential acquirers tend to steer clear of businesses heavily dependent on the owner. In this article, we’ll discuss nine warning signs that indicate you’re a hub-and-spoke owner and offer suggestions for extricating yourself from the center of your business.
- The Sole Check Signer
Signing all the checks may give you control, but it also creates dependency. Consider empowering an employee with check signing authority for amounts within your comfort level. Redirect your bank statements to your home address to review the signed checks and ensure they are not being misused.
- High Mobile Phone Bill
If your employees frequently rely on you to guide them through challenges, it will be reflected in your mobile phone bill. Assess whether you have hired too many inexperienced employees. Hiring individuals with a couple of years of industry experience can increase self-sufficiency while maintaining affordability. Additionally, consider hiring a virtual assistant (VA) to act as a first point of contact and protect your time.
- Stagnant Revenue
Flat revenue from one year to the next suggests that your business operates as a hub-and-spoke model. Every business has its limits, and as the owner, you can reach a point of maximum capacity. To address this, streamline your product and service offerings by eliminating technically complex options that require your direct involvement. Instead, focus on selling fewer items to a broader customer base.
- Unpleasant Vacations
If you find yourself handling business matters during your vacations, it’s time to break free. Start by taking one day off and assess how your company functions without your constant presence. Develop fail-safe systems and gradually work towards longer vacation periods without negatively impacting your business.
- Negotiation Overload
If you are constantly involved in approving discount requests from customers, it indicates a hub-centric structure. Delegate the authority to negotiate within a specific range to front-line employees who interact with customers. Additionally, consider tying salespeople’s bonuses to gross margin, rewarding their contribution to profitability rather than focusing solely on sales volume.
- The Sole Closer
If you are the only one who knows the closing routine in your business, you are undoubtedly at the center. Create an employee manual outlining essential procedures such as the closing routine, email footer guidelines, and voice mail protocols. Provide this manual to new employees on their first day to establish clear expectations.
- Customer Relationships Reliant on You
While it’s essential to maintain a connection with customers, relying heavily on personal relationships can be a red flag. Hire a sales team to replace yourself as the sole rainmaker and gradually introduce trusted employees to your customers. Over time, customers will become accustomed to dealing with someone other than yourself.
- The Gatekeeper
If suppliers primarily focus on wooing you, it indicates that you are the key decision-maker. To shift away from this hub position, appoint a trusted employee as the primary contact for a major supplier. Grant them spending authority within a limit you are comfortable with to handle negotiations and interactions.
- Over-CC’d Emails
Constantly being cc’d on numerous emails suggests that others seek your implicit approval or that your involvement expectations are unclear. Encourage employees to refrain from using the cc line unnecessarily and instead add you to the “to” line only when specific action is required from you.
Conclusion:
Being a hub-and-spoke owner can hinder the growth and sustainability of your business. By recognizing the warning signs and taking proactive steps to alleviate your centrality, you can create a more scalable and valuable enterprise. Delegate responsibilities, implement systems and procedures, nurture customer relationships beyond your own involvement, and empower your employees to make decisions. Embrace these changes, and you’ll be on the path to freeing yourself from the hub-and-spoke trap.