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  • Writer's pictureJulie Edge

5 Warning Signs Your Business May Not Be as Valuable as It Could Be

Business Owner Insight to Action Light Bulbs

Did you know that the most valuable companies can operate without their owner's everyday involvement?

Is that true for your business?

In the Value Builder System, it's called Hub & Spoke, and it is one of the 8 Key Drivers of Company Value. This attribute provides insight into how dependent your business is on you—measured by how your business would perform if you were unexpectedly unable to work for a period of three months.

Here’s a list of five warning signs that show your business could be too dependent on you:

1. You are the only signing authority Most business owners give themselves final authority… all the time. But what happens if you’re away for a couple of days and an important supplier needs to be paid? Consider giving an employee signing authority for an amount you’re comfortable with, and then change the mailing address on your bank statements so they are mailed to your home (not the office). That way, you can review everything coming out of your account and make sure the privilege isn’t being abused.

2. Your revenue is flat when compared to last year’s Flat revenue from one year to the next can be a sign you are a hub in a hub-and-spoke model. Like forcing water through a hose, you have only so much capacity. No matter how efficient you are, every business dependent on its owner reaches capacity at some point. Consider narrowing your product and service line by eliminating technically complex offers that require your personal involvement, and instead focus on selling fewer things to more people.

3. Your vacations don’t feel like vacations If you spend your vacations dispatching orders from your phone, it’s time to cut the tether. Start by taking a day or two off and seeing how your company does without you. Build systems for failure points. Work up to a point where you can take a few weeks off without affecting your business.

4. You know all of your customers by first name It’s good to have the pulse of your market but knowing every single customer by first name can be a sign that you’re relying too heavily on your personal relationships being the glue that holds your business together. Consider replacing yourself as a rainmaker by hiring a sales team, and as inefficient as it seems, have a trusted employee shadow you when you meet customers so that over time your customers get used to dealing with someone else.

5. You get cc’d on more than five e-mails a day Employees, customers, and suppliers constantly cc’ing you on e-mails can be a sign that they are looking for your tacit approval or that you have not made it clear when you want to be involved in their work. Start by asking your employees to stop using the cc line in an e-mail; ask them to add you to the “to” line if you really must be made aware of something—and only if they need a specific action from you.

If you'd like to dig deeper into this concept, check out this VIDEO. It explains why Hub & Spoke is a crucial aspect to building a valuable business

Curious to see how you're doing on Hub & Spoke, along with the other seven drivers of a valuable business? Take the Value Builder Assessment. With an investment of 15 minutes, you'll gain an estimate of your company's value against your industry peers and your score on the 8 drivers of business value. From there we can meet to discuss what's working, what's not, what could work a lot better, and plan accordingly.


Julie Edge Ph.D., is chief strategist and founder of Inside Edge Solutions LLC, a boutique strategy coaching and consulting firm serving business owners seeking less chaos and complication in their business and more thriving in their life—both personally and professionally. Connect with Julie on LinkedIn at @drjulieedge

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