Daniel Faggella is an Entrepreneurs' Organization (EO) member in San Francisco and founder of TechEmergence, who recently sold his eCommerce business, Science of Skill, for seven figures. As an entrepreneur who moved thousands of miles from his company's home base, we asked him to reflect on the outcome of automating processes.

As a serial entrepreneur, my goal is always to position my current company with a healthy revenue stream so that I can eventually fund another business on my own. But as any entrepreneur knows, running one business is enough to juggle, and starting another―absent of cloning yourself―requires some give and take.

I succeeded in positioning my company to generate multiple millions in revenue after three years in business. When I decided to relocate from Boston to the Bay Area, I learned by trial and error how to put my employees in the driver's seat so I could transition into a navigator's role. That enabled me to dedicate more time to growing my new company, a market research platform for machine learning products and services.

Moving three time zones away from my team proved to be a strong catalyst for figuring out how to systematize business processes, because I wasn't physically present to conduct and oversee daily operations. It occurred to me that by doing all the complex work and strategizing as CEO, I was preventing my key employees from achieving their true value and potential. I realized that if I empowered them with ownership over certain tasks, they would enjoy exercising more influence and become more engaged in the company's success.

Over the course of a year, my team and I distilled each of our main business processes―from affiliate outreach to marketing to finances―into concrete, systematic steps. My very small team of employees and contractors were directly involved in the process, because I wanted them to share in the creative responsibility and understand every step of each process and why it was in place. Together we put those concrete steps into action as they gradually took over tasks that were formerly under my sole control as CEO.

From one founder to another, I offer five key steps for systematically relinquishing your daily business operations to employees:

Step 1: Involve your team. We dedicate an entire day every quarter to in-person planning. After relocating, I flew out to meet with the team every three months for detailed discussions about our core business processes. We dissected every process that "gets money in the front door and products out the back door." We aimed to transfer six to nine core processes. Some major areas that we identified included inventory delivery and fulfillment, product and content creation, media buying and affiliate relations, internal promotions and scheduling, and metrics management.

Step 2: Determine ownership. Identify which employee is most interested in managing each specific process area, and whether they're the best fit. The key is to leverage employees' strengths and interests. We have a perfectionist, so metrics management, automating and double-checking numbers were ideal tasks for him. Another highly motivated individual took the helm in marketing, because the role inspired him to take more responsibility in growing the company.

Step 3: Distill key performance indicators (KPIs). This process requires the identification of trackable, succinct metrics for each key business area. In our case, we decided to track marketing dollars spent, website clicks, new customers acquired, new customer value within seven days of first purchase, and per capita marketing spend for the first six months of newly acquired customers.

Step 4: Develop tracking systems. It's easy to do by asking, What are the trackable metrics for any given domain on a weekly basis? We started tracking inventory by matching the number of eCommerce platform sales against merchandise shipped. By month's end, everyone on the team could spot anomalies, and the designated team member could then troubleshoot a shipping error or system glitch. When we went from $100K to $200K per month in about four months, it was due almost entirely to this tighter focus (by all team members) on our revenue-driving metrics.

Step 5: Continue to refine systems. While transitioning to my new role as director, I held one-hour weekly meetings with each core business area "owner." Key questions I asked: How well is this system running itself? How well do our systems give us transparency and accountability? What can we do to improve and make these systems fail-proof? What other numbers can we track?

Within six months, you'll know if a particular business area is thriving or if there are continual errors, because you'll have cultivated self-sustaining, trackable systems. It's a process that takes a lot of ongoing communication and grooming, but the reward is motivated sub-leaders who are excited to manage areas that mesh with their skills and goals. After about a year, depending on the complexity of your business structure, you―the business owner―should be able to assume a coaching or directing role, with your team working to continuously improve systems without needing your permission to pull the trigger.

Published on: May 5, 2017