Building a business that runs without you starts with one simple step

Building a successful business and building a business that runs without you are two very different things. Many entrepreneurs start off hands-on but never let go. They end up spending their careers building a job rather than a business. For owners looking to break out of that cycle, the first step is understanding where they are on the entrepreneurial ladder and what it takes to climb it.

Joining us on today’s episode of Business Trends Today is Brad Sugars, Founder and CEO of ActionCOACH. He’s also the host of The $100M Entrepreneur podcast and author of several business books focused on systems, leadership, and execution.

Sugars says too many business owners become the product, the system, and the bottleneck all at once. Breaking out of that cycle, he says, starts with learning to build people and systems instead of doing everything yourself.

The business ladder

Sugars built his framework around a concept he calls the business ladder. Most owners, he says, never make it past the first rung.

"I didn't build my business… I built my people, and they built my business."

Sugars says most people are taught to be good workers, not good builders. Often, entrepreneurs build what they know, he says. A hairdresser opens a salon, a chef opens a restaurant. They are good at what they do, but that’s not the same as being good at building a business. The result is a business that cannot function without its owner.

“We go into business doing something we know how to do, and we’re so good at the job of it that we forget that our job is to create a business that can do that without us,” Sugars said.

Sugars says every business owner will eventually exit their business. The question is whether that exit will be positive or negative. The negative exit is when the business fails or the owner burns out. The positive exit is building something that can run without you, whether that means stepping back, passing it on, or selling it outright.

Self-employed vs. business owner

The biggest mistake most entrepreneurs make, Sugars says, is confusing being self-employed with being a business owner. A self-employed person is the business. But a business owner builds a system that operates without them. Most entrepreneurs never make that shift, Sugars says.

Sugars admits he made that mistake early on. He says he thought his job as the owner was to be the hardest-working person in the room. The result was a business where no one could do anything as well as he could, not because he was the best, but because he never trained anyone.

“Everything was still in my head. I didn’t create any videos of how to do it. I didn’t write any checklists of how to do it or any documents sort of thing,” Sugars said.

The fix was building people and processes. As he trained his team and installed systems, he was able to move from being the center of the business to leading it. Eventually, he built a team of managers who made decisions without him. Then a team of leaders who could create and build without him.

Today, Sugars says he runs his company in about an hour a week. His CEO handles day-to-day operations. Sugars says he simply coaches the CEO.

The 30-day test

Sugars has a simple test he gives every business owner. Can you walk away from your business for 30 days and come back to find it bigger and more profitable? For most owners, the answer is no.

“If your team can’t do it without you, then you’ve created a dependency on you. Our goal in business is to create something that will make money whether we’re there or not,” Sugars said.

Most entrepreneurs go into business for freedom, he says. But without the right systems and people in place, they end up doing the opposite.

Sugars gives an example of an owner who gives customers his direct number and tells them to call anytime.  On the surface, that feels like good service. But Sugars says what it actually does is train customers to always expect the owner personally.

That pattern also impacts how the business operates internally. When owners position themselves as the only decision-maker, the business stops moving the moment they step away.

Building a business that passes the 30-day test requires deliberate design. It means installing systems, developing people, and removing yourself from the daily flow of decisions.

Breaking out of the bottleneck

For owners looking to let go, Sugars says to simply start by focusing on one area and handing something over.

Pick a task, create a system or checklist and train someone, then let go. Then keep going. Repeat the process for finances, marketing, operations or whatever can’t be done without your involvement. The goal is to create a system that not only runs smoothly without owner involvement, but one that actually moves the business forward.

Sugars admits part of the problem is emotional.  Owners have to trust the people they hired. That means resisting the urge to jump in and fix everything.

He recalls the moment he realized a team member was doing something better than he ever had. That moment, he says, is the goal.

Time before money

Most business owners think about money first. But Sugars argues that they should be thinking about time instead.

How an owner spends their time determines how fast the business grows. As long as the owner is handling tasks that a trained employee could do, the business cannot scale beyond that one person.

“Time is the only limited factor in the way that you have for your business. So how you allocate your time determines the growth of the business,” Sugars said. Often, an owner will do the work to avoid paying someone else, but Sugars says this is a trap.

"Saving a wage is costing you a fortune."

Every hour spent on low-level tasks is an hour not spent on strategy, growth, and customer acquisition.

Plan your exit, even if you never plan on exiting

Building a business that runs without you creates freedom, but it also builds long-term value and protects against the unexpected.

Over 40% of U.S. businesses are owned by baby boomers set to retire within the next five to ten years. Those businesses will either be sold, handed off, or shut down. Sugars calls that one of the biggest wealth creation opportunities available to entrepreneurs today.

But most of those businesses never sell, they simply close, Sugars says. The reason comes back to dependency. A business built around its owner is difficult to sell. A buyer cannot step in if the value walks out the door with the founder.

“If the business is dependent on you, you’re going to have a tough time selling it or at least getting full value for it when you go to sell,” Sugars said.

The solution is to build an exit strategy from the start, even if you never plan to sell. Not only does it give you options if something unexpected happens, but Sugars says businesses built to sell run better than businesses that can’t be sold.