How to build a business that isn’t dependent on its founder

If you have started a business, it will inevitably be dependent on you in the early days – you are your brand.

You win customers, approve spending, recruit people and solve problems. You probably hold important information about pricing, suppliers, clients and processes that nobody else knows quite as well as you do. You’re central to the company’s success – and that’s a strength to begin with, but eventually, it will limit growth, not to mention leave you feeling frustrated and burnt out.

You probably want to move away from everyday tasks and play more of a director role in your company’s evolution, concentrating on strategy, new opportunities and long-term performance rather than operational decisions. But achieving this isn’t simply a case of working fewer hours and trusting others to invest the same level of passion and care into your venture. You need to build a company capable of making decisions, managing its finances and serving customers without constantly referring back to you.

Here are some practical ways to start shifting responsibilities to your team and gradually reduce your role in running the day-to-day aspects of your business.

Identify where the business depends on you

Spend a few weeks recording the tasks, questions and decisions that typically come to you.

Why did a purchase require your approval? Why did the sales team ask you about a discount? Why were you needed to resolve a customer complaint?

Separate these activities into those you genuinely need to own and those somebody else could handle with the right authority, information or training. You’ll probably discover you’re still doing certain things because you’ve always done them, not because you need to! It often helps to start with the responsibilities that are easiest to transfer, and work from there.

Delegate decisions, not just tasks

Handing over administrative jobs to your team while trying to ‘own’ every decision doesn’t create an independent management function.

People respond best to defined authority. For example, a department head might approve spending up to a certain value, while a sales manager could agree discounts within predetermined parameters.

Establish what your managers can decide independently, what still requires a level of consultation, and what still needs director-level approval. It can feel uncomfortable at first, but if every important decision ends up with you, the business can only move at your own speed.

Get important knowledge out of your head

Think about what would happen if you were unexpectedly unavailable for a month. Could somebody find important supplier information? Do others understand how pricing works? Are key customer arrangements documented? Does somebody know what needs doing at month-end?

If the answers to these questions leave you on shaky ground, you need to start documenting information for everyone’s reference. Even if they’re currently just concepts, include things like your:

Standard operating procedures
Pricing and approval policies
Key customer and supplier information
Recurring financial processes with deadlines
Important contacts and system access details

In a similar vein, you also need to make sure that other team members are aware of key accounts, and vice versa. If major customers buy primarily because of their relationship with you, reducing your involvement could put revenue at risk.

Build management capability around you

Many founders wait until they’re overwhelmed to start creating a management structure. To avoid reaching breaking point – and, from a value standpoint, to get the most out of your people without increasing staffing costs – consider who needs to own your company’s core functions, and where you’re going to find the right people for each role.

You don’t necessarily need to recruit a full executive team. Existing employees may be ready for greater responsibility, while certain specialist roles can be outsourced or provided on a fractional basis (an arrangement our part-time FDs are familiar with).

The priority is making sure that somebody else is accountable for performance other than you.

You can find more information on how to fill senior leadership roles successfully here.

Give your managers better financial visibility

Managers can’t make good commercial decisions if they don’t understand the company’s financial position. If you, as the founder, are the only person who knows whether the company can afford an investment, whether a customer is profitable or why margins have dropped recently, you’ll need to make every judgement call yourself.

Give appropriate managers access to useful forecasts and KPIs. Having management accounts to hand on a regular basis will help you people work out what your cash flow looks like and whether the business is performing against its budget.

Set meaningful targets

Define what success means to each of your managers.

If you tell a head of sales to simply start increasing revenue, they might chase low-margin work instead of the contracts that make a tangible difference to your bottom line. Similarly, if you instruct an operations manager to cut costs, they might start by dropping the ball on customer service, which has far broader implications for your brand’s reputation.

It may only be one or two KPIs per person to begin with, but assign clear goals and targets to each function to avoid confusion.

As an example, you might want sales to monitor revenue, gross margin and conversion rates. Operations could track productivity, utilisation and customer satisfaction, while finance might focus on cash collection, debtor days and forecast accuracy.

Good KPIs like these allow managers to see the consequences of their decisions without requiring constant intervention from someone who is trying to distance themselves from the day-to-day.

Stop automatically solving every problem

When someone asks for help, giving them the answer is usually quicker, but this teaches the organisation to depend on you.

Instead, ask: “What do you think we should do?”

Encourage managers to explain the options, financial implications and risks before making their own suggestions. People need opportunities to exercise judgement and, occasionally, make small mistakes, because otherwise, they never develop the confidence required to operate independently.

Establish routine management tasks

As you become less involved in operations, informal conversations need to be replaced by structured communication that spreads accountability across the entire team.

In practice, this could look like weekly operational meetings, monthly financial reviews and/or quarterly strategic sessions.

Monthly finance meetings might examine actual performance against budget, cash flow, margins and forecasts, while quarterly sessions concentrate on strategic objectives, major risks and bigger opportunities.

Test whether the business can cope without you

Don’t wait for a long holiday to discover what stops working in your absence.

Break free from micromanaging, and run smaller experiments: remove yourself from a meeting you would usually attend, delegate responsibility for an important account, or stop approving a category of routine spending.

Afterwards, review what happened. Find out which decisions stalled, what information was missing, and who stepped up to own the task when you weren’t available.

You won’t be able to withdraw from everything at once, but you will soon find yourself in a position to transfer more responsibility to others and free up your time to focus on directing, not doing.

In our view, building a successful business is about creating something that performs in spite of you, not because of you. Our outsourced finance directors have decades of combined experience in helping our clients create companies that are not only financially sound, but capable of achieving fantastic things without their founders.