Direct answer: Vacation is a growth and exit strategy because it proves your management team works without you. Take a week off with structured daily calls, reduce to Monday/Wednesday/Friday, then take a full week with no contact — the ultimate validation.
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Why Vacation Is A Growth And Exit Strategy
Hands down, as a business owner or practice owner, one of the greatest strategies you can use comes down to relying on your management team to fulfill their roles and responsibilities without you. By taking vacation, you prove you are on the right path, and you validate that you have the right people in place.
Vacation is not just time off. It is a diagnostic. It tells you and every future buyer whether the business runs on process or runs on you.
This concept sits inside the Exit Ratio 360™ system as one of the most under-used strategic tools available to owner-operators. And it starts with the operating framework underneath — the Foundational Four.
The Foundational Four Comes First
Before the vacation strategy works, you need the operating structure in place. That structure is the Foundational Four:
- Standard operating procedures
- Org charts
- Job descriptions
- Decision bands
When those four elements are in place, management can actually manage. The people underneath you have the ability to make decisions and do what needs to be done. For the full framework breakdown, see why the Foundational Four allows you to sell your business or take vacation. This post picks up where that one ends — using vacation as the proof mechanism.
The Three-Phase Vacation Protocol
Your role and responsibility could be — should be — to take vacation at least once a quarter. What this proves is that you have everything in place to run an organization without you. Here is the specific protocol to run the first time you do it:
| Phase | Cadence | What You Ask |
|---|---|---|
| Phase 1 — First Vacation | Daily call at end of each day with your COO or general manager | Give me a rundown of what happened. How would you solve it? (not you the owner — them). Then share how you would solve it. |
| Phase 2 — Second Vacation (Next Month Or Quarter) | Calls only Monday, Wednesday, Friday | Same questions. What went right? What went wrong? What would you do? How would you solve the problem? Then give your answer. |
| Phase 3 — Third Vacation | No contact. No phone. No email. No text. | You do not call them. They do not call you. This is proof you have the right people in place. |
By phase three, if the business is running smoothly with zero contact from you, you have engineered the outcome buyers pay premium multiples for. See what is a profit multiple in an LOI contract for how this affects your SDE-to-EBITDA valuation shift.
The Decision Frameworks You Should Be Teaching
Hopefully you are mentoring whoever is running your organization, and vacation is not the only time this conversation happens. This should be a normal part of the conversation with your second in charge and your management team. This is how we make decisions. This is the process we go through.
Common frameworks to pass on:
- Highest and best use of time — every task evaluated against the highest-leverage alternative
- Charts and matrices — visual decision structures for comparing options
- Mental models — reusable thinking patterns for common decisions
- The Benjamin Franklin process — two-column pros and cons for hard choices
Whatever way you make decisions, pass that on to your team. You want this to be developed so the team is firing on all cylinders. Then step three of the vacation protocol becomes possible.
It Is Not A Brag If You Cannot Leave
It is not a brag for a founder, owner, or practitioner to say — the business has to run with me and it cannot run without me. If you are going to sell your business, that statement is actually a detriment. It is actually used against you. You are going to lose valuation.
Your biggest opportunity is to bring in somebody to run the organization so that the business runs whether you are there or not. This is what exit strategy planning is really about — engineering the outcome where you become optional to the operation.
The Trust Vs Skills Diagnostic
Here is where the real conversation lives. When I bring this up with owners, they often say — Scott, I don’t know if I necessarily trust my team.
Then that is a problem. You need help. The question should come down to — why don’t you trust them?
Common answers:
- “I feel like there are shady shenanigans going on.” That needs to be addressed directly. Trust cannot be earned back until the shenanigans stop.
- “I don’t think they have the skills, talents, and capabilities.” Have you let them try? Have you trained them? If that is really true, why did you hire them? Why did you put them in that role? How did they end up in the position they are in?
Start asking yourself the questions. Why can’t I take vacation? Why can’t I go away for an extended period and have the company run better without me? These questions need answers before you can build the vacation protocol.
If you are looking to sell your business in the next zero to thirty-six months, doing at least $2 million a year in revenue with a ten percent profit margin, the deal hotline is 888-DEAL-919. One of the team members will get back to you. No deal is too big.
The “What Needs To Be True” Framework
Here is a framework I learned from Ryan Deiss and Roland Frasier that reframes the whole vacation question. Instead of asking what is stopping me — ask what needs to be true.
- What needs to be true for you to take off for a week and not be interrupted?
- What needs to be true for you to go to the South of France for an entire month and have your business run without you?
- What needs to be true for you to go to the South Pacific for three months?
Notice I am going after warm locations. I am not saying — what needs to be true for you to be in Aspen for a month where it is snowing and you can ski? If that is you, you can do that. That is not my choice. I do not like being cold. I do not like wearing shoes. As of today, right now, I am not wearing shoes.
Start thinking through — how can I use vacation to my advantage? Working the “what needs to be true” list backwards from the vacation you want gives you your actual project plan for the next six to twenty-four months.
Is It A Trust Issue Or A Control Issue?
If you have not taken vacation, the honest question is — why? Is it a trust issue? Is it a control issue?
If it is a control issue, you are only going to be limited to your own capabilities. You are better off not hiring talent at all. You are better off hoarding that money and putting it in the bank, because you are going to lose it on your multiple anyway.
Somebody has to have the moral courage to tell you the truth. If you have a manager, a chief executive officer, or a chief operating officer — somebody in your organization — it should be their role and responsibility to help you grow the business without you. And it is one hundred percent your role and responsibility to help them get trained if they do not yet have the skills, talents, or capabilities. For related context on advisors having tough conversations, see before you hire an advisor or consultant, understand this one rule.
What If You Don’t Have The Person Yet?
Last part of this content — go out and find the person you need. If you do not have that person in place, then by all means start a hiring process.
If you were going to hire me for consulting or advisory and you said — hey Scott, here is my position, I don’t have anybody who could do that — my answer would be direct. It is time to put on your big boy pants, your big girl pants, or your asbestos underwear — whatever phrase you need to hear to get the ball rolling.
You need the ability to leave for a week, two weeks, three weeks, a month. You need to get away and recreate. And if you are inclined to sell, you need to prove to your buyer — I don’t need to be around.
The Exit Consequence Made Concrete
Here is the last thing on this section. If the company cannot run without you and you go to sell, you are going to be stuck at that office for three, six, nine, twelve, or eighteen months writing out standard operating procedures, org charts, decision bands — all the things you could have put in place before the sale.
You could have gotten a better multiple. Instead you are doing the work post-close, without the leverage, and answering to a new owner. My hope, my goal, is that you do not leave money on the table. My hope is that you go on vacation as a byproduct. And if you choose to sell, you are so much further ahead.
Related cluster reading: what is a profit multiple in an LOI, should you take an earn out, what is a tuck in acquisition.
Frequently Asked Questions
Why is vacation a business growth and exit strategy?
Vacation proves your management team can run the business without you. That proof is what buyers pay premium multiples for. Owner-operator businesses that cannot function without the owner get lower multiples. Businesses that run on process while the owner is on vacation get higher multiples and cleaner exits.
What is the three-phase vacation protocol for proving your team works?
Phase one: first vacation, daily calls at end of day asking how your COO would solve issues. Phase two: next vacation, calls only Monday, Wednesday, Friday. Phase three: full week with no contact — no calls, emails, or texts in either direction. Progression proves the team is genuinely capable.
How does taking vacation affect your business valuation at exit?
It is not a brag to say the business cannot run without you. If you are selling, that statement is a detriment used against you and you will lose valuation. Buyers pay lower multiples for owner-dependent businesses because they have to install operations after acquisition. Proving you can leave lifts your multiple.
What questions should you ask your team during vacation?
Two questions each time you check in. What happened today and how would you solve it? The critical part is asking how they would solve it before offering your own answer. Then share your approach. Over time your team internalizes your decision-making process and stops needing your input.
What is the “what needs to be true” framework?
The “what needs to be true” framework, learned from Ryan Deiss and Roland Frasier, reframes the vacation question. Instead of asking what stops you from taking vacation, ask what would need to be true for you to leave for a week, a month, or three months. The answers become your action plan.
What if you don’t trust your team to run the business?
The trust question breaks into two subquestions. First — do you suspect shady shenanigans? If yes, address them directly. Second — do you think they lack skills? If yes, have you let them try and trained them? If you have not, the trust problem is actually a leadership problem.
Is it a control issue or a trust issue keeping you from vacation?
If it is a control issue, you will only be limited to your own capabilities. Owners who cannot delegate are better off not hiring talent at all — better off hoarding money in the bank because they are going to lose it on their multiple anyway. Control-driven owners cannot professionalize their businesses.
What if you don’t have anyone to leave in charge?
Start a hiring process. If your position is that you do not have anyone who could run the business, it is time to put on your big boy pants, your big girl pants, or your asbestos underwear — whatever phrase gets you moving. The gap will not close by itself and it costs you money every year.
What is the exit consequence of not being able to leave?
If the company cannot run without you and you sell, you get stuck at the office for three, six, nine, twelve, or eighteen months writing standard operating procedures, org charts, and decision bands — all the things you could have built pre-sale for a better multiple. Post-close, you have no leverage and answer to the new owner.
What are decision-making frameworks to teach your team?
Four to teach: highest and best use of time (evaluating tasks against the highest-leverage alternative), charts and matrices (visual decision structures), mental models (reusable thinking patterns), and the Benjamin Franklin process (two-column pros and cons). Whatever frameworks you use to make decisions should be passed on to your team.
Full Transcript
Hands down, as a business owner or practice owner, one of the greatest strategies that you could use comes down to relying on your management team to fulfill their role and responsibilities without you. By you taking vacation, you can prove that you are on the right path, and you can validate that you have the right people in place. So what do you need to know about taking vacation, and how does it help you? This is a fantastic question. I am Scott Sylvan Bell, coming to you live from Consulting Secrets on a perfect day to talk about business growth opportunities, the Foundational Four, exiting a business, growing a business, and a fantastic day to talk about you.
I want to start with the Foundational Four, give you an explanation of what that is, and then we will roll into why you need to take vacation time. The Foundational Four is this — you need standard operating procedures, org charts, job descriptions, and decision bands. When you have those Foundational Four in place, you have the capability for management to manage. The people underneath you have the ability to make decisions and do what needs to be done.
Your role and responsibility could be — should be — to take vacation at least once a quarter. What this is going to prove is that you have everything in place to run an organization without you. It is not a brag for a founder, for an owner, or practitioner to say the business has to run with me and it cannot run without me. If you are going to sell your business, that is actually a detriment. That is actually used against you. You are going to lose valuation. Your biggest opportunity is to bring in somebody to run the organization.
You do it like this. If it has never been done before and you have the Foundational Four in place — job descriptions with decision bands, org charts, and SOPs — then what you do is take a week off. In that week, at the end of every day, you call whoever your chief operating officer is, or your general manager. You are saying — give me a rundown of what happened. Then you are going to say — how would you solve it? Not you the owner, not you the founder, not you the practitioner. You are going to ask the person right below you — how would you solve those problems? Then you share with them how you would solve them.
Then you go on vacation again. When you go on vacation the next month or the next quarter, you say — okay, we are going to connect on Monday, Wednesday, and Friday. We are not going to connect every day. We are going to go through the same process. What went right? What went wrong? What would you do? How would you solve the problem? Then I will give you my answer.
Hopefully you are mentoring whoever is running your organization, and this is not the only time you are having this conversation. When it comes to vacation, this realistically should be a normal part of the conversation with your second in charge, with your management team. This is how we make decisions. This is the process we go through. We either use highest and best use of time, we use some sort of chart, we use mental models, we use the Benjamin Franklin process. Whatever way you make decisions, you want to pass that on to your team. You want this to be developed. Because when you have a team firing on all cylinders, then what ends up happening is you get to step number three. You go on vacation and say — you cannot call me. I am not answering phone calls, emails, or text messages. I am not going to call you, I am not going to email you, I am not going to message you. It is proof. Proof that you have the right people in place.
If you really wanted to babysit, you do not need a general manager. You do not need a chief operating officer. You just need you. Which does not allow for you to run a company efficiently. If you are using highest and best use of time and mental models, it puts you all the way at the top.
There becomes a conversation, and this is the conversation. Scott, I do not know if I necessarily trust my team. Okay, then that is a problem. You need some help. The question should come down — why don’t you trust them? Well, I feel like there are shady shenanigans going on. That needs to be addressed. What is the next concern? Let us go through concerns, aka objections. Scott, I just do not think they have the skills, talents, and capabilities. But have you let them? Have you tried? And if that is true, why did you hire them? Why did you put them in place? How did they end up in the role that they are in?
Start asking the questions. Why can’t I take vacation? Why can’t I go away for an extended period of time and have the company run better without me? You have to start taking a look and saying — these are the questions I need to have answered.
You could use the format I learned from Ryan Deiss and Roland Frasier. What needs to be true? What needs to be true for you to take off for a week and not be interrupted? What needs to be true for you to go to the South of France for an entire month and be able to have your business run without you? What needs to be true for you to go to the South Pacific? If you notice, I am going after warm locations. I am not saying — what needs to be true to put you in Aspen for a month where it is snowing and you could ski? If that is you, you can do that. That is not my choice. I do not like being cold. I do not like wearing shoes. As of today, right now, I am not wearing shoes.
Start thinking through — how can I use vacation to my advantage? If you have not taken vacation, ask yourself why. Is it a trust issue? If it is a control issue, you are only going to be limited to your capabilities. You are better off not hiring talent at all. You are better off hoarding that money and putting it in the bank, because you are going to lose it on your multiple.
Somebody has to have the moral courage to tell you the truth. If you have a manager, a chief executive officer, a chief operating officer, or somebody in your organization, it should be their role and responsibility to help you grow the business without you. And it is one hundred percent your role and responsibility to help them get trained if they do not have the skills, talents, or capabilities.
Last part of this content — go out and find the person you need. If you do not have that person in place, by all means, start a hiring process. If you were going to hire me for consulting or advisory and you said — hey Scott, here is my position, I do not have anybody who could do that — it is time to put on your big boy pants, your big girl pants, or your asbestos underwear. Whatever phrase you need to hear to get the ball rolling, so that you have the ability to leave for a week, two weeks, three weeks, a month. So you can get away and recreate. So you can prove, if so inclined, to your buyer — I do not need to be around.
Because the last thing on this section — if the company cannot run without you and you go to sell, then you are going to be stuck at that office for three, six, nine, twelve, or eighteen months writing out standard operating procedures, org charts, decision bands, all the things you could have put in place. You could have gotten a better multiple. My hope, my goal, is that you do not leave money on the table. My hope and my goal is so you can go on vacation, and as a byproduct, if you choose to sell, you are so much further ahead.
