Redwood trees are “the tallest of all living things”, reaching impressive heights of over 80 meters, but what many people don’t realise is that their roots are surprisingly shallow. Rather than going deep into the ground, a Redwood’s roots spread widely just beneath the surface of the soil, spreading 20-25 meters wide.
While this may seem a disadvantage, it’s a brilliant adaptation. The Redwood relies on the strength of its neighbouring trees to anchor it in place and create a strong network of support which holds the trees up. As a result, they withstand whatever nature throws at them.
Just as strong winds can uproot a Redwood if it’s not anchored to its neighbours, a business that is too dependent on one person can suffer significant losses if that individual decides to move on. Heaven forbid the one person the company is over-reliant on is the business owner. If that is the case, the business attractiveness and readiness index just fell through the floor, together with the company’s potential value.
So, what’s the solution to maximise value realisation in a business that’s too reliant on the business owner? The root system – spread the load.
As counterintuitive as it may sound, the business owner needs to get out of their own way first! Make space for change. Shift the paradigm from driving income to value creation. Secondly, build a strong management team and implement processes and systems that can continue to operate effectively without the business owner “in” the business.
The longer the runway to bring about change, the higher the probability of realising the company’s potential value.
So, take a lesson from nature and reduce the company’s reliance on a single individual by building a business that is well-rooted, well-supported, and capable of weathering any storm. Doing so will make a scaleable, valuable, and saleable business.
We can help you navigate through the three stages of value optimisation
PLAN – GROW – EXIT
to ensure you leverage the intangible assets of your business, produce more top-line and bottom-line growth, and, when the time is right, exit on your terms.
We aim to help you create a scalable, valuable, and saleable business.
Whether you want to grow your business or be in the position to sell your business for the highest multiple, we’ll get you to a place where you have choices.
