Editor’s Note: This is the first in a two-part series originally published in Frame Building News.
– By K.P. Persaud –
In Part One of this article, we discussed what it means to work on your business, not in it. I also had you perform a written diagnosis of your current business focused on the technical, managerial, and entrepreneurial aspects of your business. If you haven’t yet read Part One, please do so now to get the most out of this article. CLICK HERE TO READ PART ONE
Here in Part Two, we’ll look at how you can make the transition from working on your business, not in it, and thereby improve not only your business but also your life outside of work.
BEGIN WITH THE END IN MIND
Before looking at some of the actions you should take, let’s “begin with the end in mind,” as Stephen Covey wisely taught. Let’s skip ahead and see how your business could look if you successfully transitioned to working on your business, not in it.
Imagine owning a business where you could be away for extended periods of time. You’re not constantly calling or checking your e-mail to see if there’s a fire you need to put out. Instead, you casually check in with a manager you fully trust to get updates. Everything is going great.
When you return to the business after being gone, imagine walking into an operation where everyone is doing their job—and doing it well. It’s not as if your employees just saw you pull into the parking lot and they all hurriedly try to look busy.
You then ask for a printout of your current numbers and see that everything is on track. You check with your workers on the front line and see that the quality of your product or service is just as good, if not better, than if you had been the one directly supervising it.
Your sales numbers are up. There’s even talk of opening a second location for your business in a region 200 hundred miles away. From a logistical standpoint, that second location would make it easier to meet all of the demand you’ve been getting from that area.
This doesn’t have to be a fantasy. This is the kind of business you can own one day own, so don’t sell yourself short.
Take the time now to write down your vision of an ideal business. Don’t write down what changes you need to make. Rather, just write a description of what your ideal business looks like and pretend you’ve already made the necessary changes to get there.
The more detail you can provide of your ideal business, the more you will get out of this exercise. We’ll eventually “reverse engineer” how you got to this end point and see what you’ll need to do to get there.
Making the transition to working on your business is a matter of addition (adding more of what you do best and adding other things you should be doing) and subtraction (getting rid of what you should not be working on).
Let’s take a look at the written diagnosis I had you perform in Part One of the article (when you wrote down your strengths and weaknesses regarding the technical, managerial, and entrepreneurial aspects of your business and how you allocate your focus among all three). Let’s also take a look at the written description you just did of your ideal business.
To one day have the ideal business you just described, what are some of the big changes you need to see? What do you need to add? What do you need to subtract?
When you look at the diagnosis of your current business, what areas are holding you back? For example, if in your ideal business you would like to only be physically present at the business part-time, how would that affect things in the Technical column? Could you still be allocating such a large percentage of your time to the technical aspects of your business?
Going from your current business to your ideal business can seem like a daunting task. You might be thinking, “Sure, it makes sense that I need to spend less time on technical things—and spend more time on the managerial and entrepreneurial things—but how can I accomplish that in real life?” You might also be unsure of how to re-balance your focus and what exactly you need to improve in each column.
To help you make the transition to your ideal business, I will give you four steps to follow. These steps will overlap with one another to a certain extent, but I’ve separated them out so that you can think of them as distinct areas of focus.
Something else to keep in mind is that as a business owner, your goal should be to view your enterprise as a product you will want to sell one day. What features would someone want to see in that product before buying it or investing in it? What would they not want to see?
Here are the steps to follow. As you’ll notice, these steps are all about helping you towork on your business, not in it.
STEP ONE: INSTALL THESE COMPONENTS IN YOUR BUSINESS
The business model you will work towards must have the following components:
- Financial Mastery: If you don’t know or understand your business’s numbers, there’s no point in worrying about anything else. Even if you’re afraid of what your current numbers might tell you, don’t let that stop you from taking a look. You must install a financial system to help you understand fixed and variable costs, profit and loss concepts, and cash flow management. Your numbers will be your roadmap as you re-shape your strategy. You’ll begin to see where you should be directing your focus and where you shouldn’t. The numbers will continue to guide you at every step.
- Destination Mastery: Plan your work and work your plan. Short and long-term goals must be established according to your finances, market demand for your products, and other factors. Once you identify the direction your business should be headed for attaining maximum profitability, you will chart each step of the journey ahead of you by developing strategic plans. This step is all about alignment. If all aspects of your business, including all personnel, are headed in the same direction, your business will be propelled towards the goal you have chosen.
- Delivery Mastery: Create a system to plan and constantly deliver promises to your customers. Supply base, logistics, distribution, manufacturing, and quality control are part of this system. With the right system in place, your operation can run like a well-oiled machine.
- Time Mastery: Identify the highest and best use of your time and that of your employees. Critical mass must be directed to the key initiatives to get the job done in the right amount of time—and at the right times. This is about execution of your plans with maximum efficiency.
STEP TWO: POSITION YOUR BUSINESS BASED ON MARKET RESEARCH AND DATA
Position your products and services to reach the target market you have strategically identified. Your sales and marketing efforts will be driven by market research and other data. The information you compile will tell you what you should sell, who you should sell it to, where you should sell it, when you should sell it, how much you should sell it for, and even how you should sell it. Stop wasting your money on a marketing campaign that’s simply shooting in the dark. More importantly, don’t sell in a way that, even if successful in landing customers, would cut into your profitability.
STEP THREE: SYSTEMATIZATION AND DOCUMENTATION
To walk away from your business—whether to sell it in the future or just to get some much-needed time away—you must install systems and processes that will carry out your mission. You must also document how these systems and processes are to work in painstaking detail. Do what you document and document what you do. Imagine if you wanted to replicate your business and put it in another location 500 miles away. Or imagine if you wanted to create 50 more businesses scattered about the country just like yours. Could you hand over the written documentation you have created so that a general manager or franchisee could be up and running without much input from you? That should be the goal in this step. In the end, you should have an operational “dashboard” where all important data is centralized and from which you can properly oversee and manage your operation(s).
STEP FOUR: PUT YOUR TEAM IN PLACE
You need to install a team that reflects your values, mission, and vision at all levels of the enterprise. You could even consider hiring a CEO or COO. Remember that you are the business owner, but that does not necessarily mean you should be the one making every operational decision. You might recognize that someone else is better equipped than you are to run the business. Or you might decide that you could do the job just fine but would prefer the additional freedom.
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By following these four steps, your focus amongst the technical, managerial, and entrepreneurial aspects will become naturally and appropriately balanced.
For example, an examination of your current numbers should indicate that you, as the business owner, should not be the one immersed in the technical aspects of your business. You might calculate that your time as a business owner is actually worth $250/hour when it’s all said and done. You then calculate that your technical work for the business is only worth about $20/hour.
Knowing that information, you then “fire yourself” from some of the technical work you’re doing and find a replacement you can pay $20/hour. Hence, you begin distancing yourself from the technical aspects so that you can focus on the managerial and entrepreneurial aspects of your business.
This kind of high-performance thinking isn’t terribly complicated. For whatever reason, though, the majority of business owners never take the time to think critically about their business in this way. Remember that your business will not rise to a higher level unless you (1) imagine a higher level to be possible; and (2) have thought through how you will get to that level.
SPEEDING UP YOUR TRANSITION AND MAXIMIZING YOUR RESULTS
What I’ve outlined above is the framework that you can use for working on your business, not in it. Start by addressing the “low hanging fruit” that you identify in your initial diagnosis. I guarantee you will see results. Over time, you will be able to expand your reach to improve other aspects of your business.
At the same time, though, I know that being a business owner can feel like you’re in a footrace. You feel the urge to go faster, faster, faster and do whatever you can to not collapse from exhaustion.
As a business coach, my job is to tap you on the shoulder and ask you things like: “Hey, instead of running to wherever it is you’re going, why not drive that car over there?” I’ll also make sure you know where you’re going, how you plan to get there, and whether you should be the one going there in the first place.
Getting help from a business coach or similar consultant can help you maximize your results and in a much quicker time frame. A business coach can help you do all the following: identify your biggest needs, create an informed plan of attack, execute your plan, and monitor your progress.
Making the transition to working on your business, not in it, can be the best decision you ever make. By making this transition, your business can be more profitable and scale at levels you never imagined possible.
Additionally, you as the business owner can get back to enjoying life outside of work. Maybe it’s more time with kids and grand kids, more time to take that trip you’ve been thinking of, or more time pursuing the hobby you love. There’s more to life than feeling like you’re constantly drowning at the business you own.
Don’t wait another day to start making the transition.
KP Persaud counsels owners and executives interested in taking their businesses to the next level. He provides affordable and convenient services to clients across the country via online video conferencing. Contact him at KuldeepPersaud@actioncoach.com or visit kppersaud.com.