Grow a Sellable, Self-Sufficient Company: Business Coaching for Creatives

Avoiding dependencies is one of the challenges business owners face. We offer business coaching for creatives & other industries, so we’ve seen many leaders struggle with breaking free from owner dependence. This challenge also presents a key opportunity to create value and protection from over exposure to risk. 

As an owner of a creative firm such as marketing, design or advertising, can you confidently say you’re avoiding dependencies? Below you’ll find some simple, tangible business coaching steps that can be applied to your creative-oriented business.

Working alongside entrepreneurs in many industries for more than ten years, we’ve had the pleasure to become acquainted with many owners at various stages of their business. A good friend in particular, Dave, owned a marketing design firm with a partner for years. Unfortunately, his partnership folded and Dave was left on his own to grow his business. 

For a moment, it was a relief for Dave to be on his own — no one to consult with on decisions, no one to interfere with projects and he was the sole beneficiary of the firm’s revenue.

That relief soon turned to dread. When he took a two-week vacation, so did his earnings. His business was solely dependent on him.

In our proven operating system — the Value Builder System — there are 8 drivers that help turn a successful business into a valuable asset. A couple of these drivers specifically address dependencies:

• The Hub & Spoke measures how much your business relies on you to operate, making it harder to scale and, ultimately, less valuable. I invite you to look beyond just yourself as an owner. 
• The Switzerland Structure  measures how dependent your business is on any one customer, employee, or supplier because too much reliance on any single point puts your company at risk and lowers its value.

Here you can dive a little deeper into the Switzerland Structure with this 2-minute video. 

Imagine if you’re completely dependent on a software system, a supplier of tools, products or equipment or a customer that drives 25%+ of your annual revenue. How much sleep would you get at night knowing your business is at great risk if that software system, supplier or customer decides to tap out? The proverbial “hitting the fan” happens instantly.

Upon Dave’s return from his vacation (aka HUGE wake up call), he employed three strategies that paid great dividends in the ultimate sale of his design business a few years later:

1. Diversification of customer base: Ideally, no one customer accounts for more than 15% of total revenue. Dave lost a major customer who accounted for 21%+ of annual revenue. He contracted out design services to maintain that customer relationship and revenue, but this freed up time for him to acquire several other new customers, lowering the revenue concentration.
2. Supplier redundancy: Ensure you mitigate supply chain disruptions by diversifying your supplier base. Dave had a great designer (contractor) who chose to go to work full time for one of his other clients. Dave secured relationships with four other designers to ensure work didn’t stop when one designer couldn’t take on new projects.
3. Employee cross training: Develop a “workforce” capable of multiple roles to backfill as needed. This ties into Dave’s issue with one designer leaving. The four others he partnered with had a good mix of design, copywriting, and web development which allowed him to not depend on just one. 

One of the best ways to begin the process of strengthening the Switzerland Structure driver? Start documenting HOW you do business. This helps you get the wisdom you have in your head into the public domain of your team so that you mitigate at least supplier concentration and key teammate syndrome. 

Take the first step toward freedom from day-to-day operations. Download The Definitive Guide to SOPs e-Book so you can start documenting the systems that make your company not only scalable but also sellable.

Want to build a more valuable, self-sufficient business? Contact us to explore how the Value Builder System can help you reduce owner dependence and grow a more valuable business.

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Preston True

Preston True is the founder of Get TPA Fit, a rapidly growing business coaching and value-building firm. Based in Detroit, Michigan, TPA has worked with hundreds of entrepreneurs and leadership teams on day-to-day problem solving, business culture and long range vision, so they ultimately learn how to delete chaos, earn more and build value.

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