In our first example , the owner ’ s compensation gets credited to Adjusted Business EBITDA , but this benefit is then cut in half because the buyer needs to backfill operations with a skilled general manager . In the second example , by contrast , the buyer incurs a lower cost to promote a well-trained existing employee – nobody new is needed , and the business value retains much more of the benefit of the owner compensation adjustment . Better still , the business retains a familiar face at the helm and a level of continuity for remaining staff . At the end of the day , this difference turns out to be worth nearly $ 400,000 to this owner – not bad for an investment that had already made their life easier in the first place .
So maybe you have an Office Manager that ’ s trusted , organized and always on the ball . Perhaps your young lead technician is eager to learn anything you ’ ll teach . Progress can start small , like walking these promising employees through the P & L , having them take on delivery planning items , or giving them oversight of additional employees . If things go well , providing these employees incremental exposure to all aspects of the business and its management responsibilities can build a knowledge base that will enable them to make good decisions even in new or unfamiliar situations . Before you know it , you might find yourself taking December trips to Florida , secure in that your team can reach you by phone if they need to – but that they probably won ’ t need to .
It can be difficult to relinquish control , especially over critical business tasks like ordering fuel , approving estimates , or setting pricing . But an owner should weigh this discomfort against all the upside potential : the satisfaction of seeing employees grow and take on new opportunities ; a higher future sale price for the business ; and most importantly , the ability to spend more time with family , friends and passion projects , confident that your business is in good hands . Something that seemed unthinkable might instead turn out to be long overdue . l FON
Griffin Sharp is a director at Cetane Associates ( www . Cetane . com ), which provides financial advisory services to business owners in home services industries .
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26 JUNE 2024 | FUEL OIL NEWS | www . fueloilnews . com