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Have you ever considered hiring a president or general manager to run your business day to day? If your goal is to create a business that can thrive without you, a second-in-command (2iC) can free you up to work on more strategic projects.
A good 2iC will also make your business more valuable. Hub & Spoke, one of the eight factors we use at The Value Builder System™ to measure your company’s value, evaluates how dependent your company is on you. When you score low on Hub & Spoke, it means your company needs you to run it and that it may be of little value without you. One way to reduce reliance on you is through standard operating procedures.
If you decide to sell one day down the road, having a 2iC can also help you avoid a lengthy earn-out because you can argue that you’re not required to run your business day to day.
Most importantly, a 2iC often brings different skills to your business. While you may thrive on creating, a good 2iC might excel at standardizing processes and building systems – rarely the strengths of most founders.
How Nick Beckett Quadrupled Revenue at Dimple
For example, take a look at the story of Damien James. Damien is the founder of Dimple, a company that provided podiatry appointments in retirement homes. Damien built Dimple to $2.5 million in revenue before he reached a plateau. No matter what he tried, Damien couldn’t bust through the $2.5 million ceiling.
Frustrated, Damien brought in Nick Beckett to be his 2iC. Nick had played a similar role at a tea company called T2. He had grown revenue twenty-five-fold, leading to Unilever’s acquisition of T2.
Nick immediately impacted Dimple by leveraging the sales and marketing playbook he had built at T2 inside Dimple. Nick drove revenue from $2.5 million to $11 million in less than three years. Soon after, Damien sold Dimple for $13.4 million.
Hiring a 2iC is arguably the most challenging thing a founder can do. You first need to ensure your 2iC has the skills and scrappiness to run a bootstrapped business. You have to figure out if you share comparable values and a similar vision for what you can accomplish together. You next need to work out the messy business of finding a compensation model. You’ll need to offer your 2iC enough to convince them to join your company while still aligning their goals with yours.
The hardest part is giving your 2iC the freedom to do their job. Founders tend to be dominant forces in the companies they start. Unless you’re willing to step away, you need to find a way to work together without undermining your 2iC.
If you’re frustrated with how dependent your company is on you or feel like you’re stagnating, it may be time to share the load with a 2iC.
Learn more about the Hub & Spoke Driver and how decreasing your business’s dependency on you can increase its value.