So, you own a business. You are the person in charge and your hands are in every aspect of your business – because you know you can do it best, everyone else is mostly incompetent, and nobody seems to care like you do.
These statements may all be true, but I can tell you right now that if you continue to look at your business in this way, you may carve out a living but you will never meet your potential.
We have all heard the adage: “If you want it done right then do it yourself!” But then what about, “Don’t work harder, work SMARTER!!” Doesn’t it always seem that we are working harder and harder to meet our standard of excellence – yet we seem to feel further and further from the real money we hoped to make when we opened our doors?
The problem is that for new business owners, we start out HAVING to do many, if not all, of the jobs IN our business, yet we never find the time to invest working ON our business.
You are not alone.
This is one of the biggest issues facing small and medium-sized businesses, and perhaps the biggest trap they fall in as they pursue their dreams.
If we look at it objectively, there are really only three ways to engage with our business:
As a technician doing the work of the business
As a manager making sure the work is being done to specifications and on time
As the leader, setting direction and creating the conditions for success as your business moves forward.
And make no mistake; all three of these are absolutely vital functions of the business. The problem is that well over 99 percent of our time is usually lost in some sort of technician or management role.
So what is the role of the owner? I hear a lot of different answers, but if you were to watch how most owners engage in their business, you would come away seeing that they believe that working IN the business, albeit at a high level, is their number one priority. They may say something else, but the proof is in their actions. We showcase our priorities by what we choose to do. The end result is that we work IN our business all day – in fact, usually 10, 12, 16-hour days, doing $10/hour type of work and then we wonder why we didn’t earn $100 per hour.
It just doesn’t work that way.
Let’s take a second to consider the role of owner. It isn’t just a title we get to put on our business card. The title of owner, like every other title (Sales Director, Cashier, Human Resource Manager etc.) has it’s own set of activities and responsibilities.
Most people are happy to just have the title and RARELY engage in the difficult work of an owner.
While it is important to make sure your product or service is done well and on budget – that is the job of a manager, NOT an owner. The building of the product, the time spent with customers, is the job of the technicians in your business.
The job of the owner is simple: Grow the value of the company. Easy. Clear. The most challenging work you have in front of you (the reason most people choose to hide IN the business and avoid the tough stuff).
When I work with clients, I tell them, you improve the value of your company by setting the conditions for success and making sure you have the right team in place.
They both sound easy (and they probably aren’t as difficult as you might think) but they are both unique skills and activities that are rarely engaged in by accident and need to be intentionally worked on.
So how do we set the conditions for success? While every business has it’s strengths and weaknesses, here are a couple of things to think about as you analyze your business to find the areas you can focus on to build a more valuable business and create far greater profits as a result:
Do you have a clearly defined target market? When you are asked who you want to work with, is your answer, “I can do business with anyone!” This is actually limiting your success. Get better clarity on who you are the best fit for and who you want to be working with each and every day.
Is your business well defined? If you were to leave your business without warning for six weeks, could others follow in your footsteps, or would you return to catastrophic mess that you may never fully recover from? Start by documenting the most important functions in your business into a step-by-step process that others can follow. This will not only force you to notice what you do now to be successful but even just taking the time to write it down will open you up to new ideas to improve on the process – creating better efficiencies and productivity – or said another way allowing you to put more money in your pocket every single day.
Lastly, making sure you are always working on building your team. This seems like a no brainer, but too often we don’t have much experience hiring well, and perhaps because it is the largest item on our income statement, we look here first to save a few dollars. Make no mistake; if you are a small business, you cannot afford to save money on cheap people. Bad hires are a luxury only big business can afford, but not you. Build your skills, develop a process around hiring for each position, and always, always, always be on the lookout for good people – even if you don’t need them today, know where they are so you can approach them when the time is right for you.
Also, remember to hire slowly and fire quickly. Nothing is more expensive than a bad hire or an employee that has checked out but is still on your payroll.
I know this isn’t comprehensive, we could deep dive on each of these issues for weeks and months, however, you have a couple of things to focus on in your business as you take time to sit in the owner’s chair and do the job of owner.
As you work to improve on these, your time will free up, your product and services will improve and you will begin to see your profits grow until you have built the business you set out to build when you opened the doors.
Next month we will discuss the most important business activity – goal setting for the upcoming 12 months.
Have a great holiday!
Michael D. Preston is a CA licensed Business Broker that is committed to helping business owners increase their valuation and sell their business for the most money possible. You can contact him at 310.994.7037 or email him at Michael@InflectiveGrowth.com.