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How reliant is your business?

As a sole trader, especially in the early part of a business and in a service based business, it is common for the owner to be critical to business operations. Without the owner, the business stagnates or slides backwards.

There are a number of consequences to this reliance, and all of them can impact on the long term success of the business.

1. the owner gets stressed and exhausted as they can’t afford to take a holiday or even a long weekend, and are likely to work when sick and/or recovering

2. something unexpected happens to the owner (e.g. a car accident, appendicitis, a premature birth, a critically ill loved one) and no one else is able to run the business so the business fails before the owner gets back

3. things are done by habit – there is no opportunity for new ideas or better methods, old errors get repeated, the owner can get bored and the business doesn’t grow as much as it could

In larger businesses, the same reliance can occur if people have very strictly defined roles. For instance, if only one person can access the bank account what happens to outstanding invoices while that person is seriously ill for two months? Or if that person was the only one who could update prices on your website, or operate the cash register, or prepare quotes

So how reliant is your business on one or two key people? What critical tasks need to carry on in the absence of that person(s)?