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Why Delegating Responsibility is Key to Your Business’s Success

If you were to draw a picture that visually represents your role in your business, what would it look like? Are you at the top of a traditional Christmas-tree-like organizational chart, or are you stuck in the middle of your business, like a hub in a bicycle wheel? 

As anyone who has tried to fly United when Chicago O’Hare International Airport has been hit by a snowstorm knows, a business is only as strong as its hub—the person or operation at the center. The moment the hub is overwhelmed, the entire system fails.

People looking to acquire businesses generally avoid those operating with just one person at the center, known as hub-and-spoke-managed businesses, because they understand the dangers of buying a company that’s too dependent on the owner. Here are eight signs that your business is hub-and-spoke, and some ideas for changing it:

1. You Sign All the Checks 

Most business owners sign the checks, 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 checks up to 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 all signed checks and make sure the privilege isn’t being abused.

2. Your Revenue is Flat Compared to Last Year

Flat revenue from one year to the next can be a sign you are the 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 Aren’t Really Vacations

If you spend your vacations dispatching orders from your mobile, it’s time to cut the tether. Start by taking one day 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. For ideas on what to do so you can actually enjoy your time off, check out our Six Ways to Profit from Your Summer Vacation blog article.

4. You Spend Too Much Time Negotiating

If you find yourself constantly having to get involved in approving discount requests from your customers, you are a hub. Consider giving front-line, customer-facing employees a band within which they have your approval to negotiate. You may also want to tie salespeople’s bonuses to gross margin for sales they generate so you’re rewarding their contribution to profit, not just chasing skinny margin deals.

5. You Close Up Every Night

If you’re the only one who knows the closing routine in your business (lock the doors, set the alarm), then you are very much a hub. Write an employee manual of basic procedures (opening and closing routines, email footer to use, voice mail protocol) for your business and give it to new employees their first day on the job.

6. 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 over time your customers get used to dealing with someone else.

7. You Get the Tickets

Suppliers’ wooing you by sending you free tickets to sporting events can be a sign that they see you as the key decision-maker in your business for their offering. If you are the key contact for any of your suppliers, you will find yourself in the hub of your business when it comes time to negotiate terms. Consider appointing one of your trusted employees as the key contact for a major supplier and give that employee spending authority up to a limit you’re comfortable with.

8. You Get CC’d on More Than Five Emails a Day

Employees, customers, and suppliers constantly cc’ing you on emails can be a sign that they are looking for your tacit approval or that you have not made clear when you want to be involved in their work. Start by asking your employees to stop using the cc line in an email; 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.

Need Solutions? Ewing Can Help

Need more ideas to transform your business from the hub-and-spoke model and increase its value while making your work life more manageable? Regardless of where you live in the country, Ewing is here to help you rise to meet whatever challenges you may face.

We’ve been around for 100 years, and we’re happy to share what we’ve learned to help you grow your company.

If you’re a member of our ProAdvantage loyalty rewards program, you can log in to your account any time to take advantage of the many services and solutions Ewing offers to help our customers succeed. If you’re not a member, visit our ProAdvantage page to learn more today.

You can also find a wealth of business ideas and solutions in our blog article and YouTube video libraries, Education course offerings, and newsletters. Prefer a face-to-face discussion? We’ve got that covered, too. Just visit the Blue Counter at one of our 240 local Ewing locations nationwide to speak with a friendly, knowledgeable professional.

TAGS: Business Tips, Business Growth, Grow Your Business, Business, #ewing100years, ProAdvantage