Work on your business not just in your business! Maybe you have heard this phrase a thousand times or maybe you have never heard it before. But what does it truly mean to work on your business and what's the point, you're busy enough as it is!
The idea of working on your business was popularized by Michael Gerber in his book The E-Myth (If you haven't read it I recommend you read the E-Myth Revisited) in which he contended that each small business owner finds themselves stuck between three roles within their business as shown below:
When you first start out you need to be always doing the work to get paid. However, as the business begins to grow, you begin juggling more and more balls and eventually you begin to drop some. As the balls begin to drop you become stressed and find yourself running from fire to fire with no end in sight. Working on your business is about avoiding this stress. Having clear processes in place will allow you to hire additional help but still ensure a quality product or service is being delivered.
Don't get stuck as the Chief Everything Officer always putting out fires
Working on your business will be a lifelong endeavour. It can feel daunting and time consuming at first but if you truly want to create a business that produces high quality products or services without you burning out, working on your business is a must. I know you are busy taking care of business, below is an easy way to begin working on your business without feeling like you are further drowning. As your business grows further and you realize how much working on your business can reduce your stress and improve your product/service there are many more tools that can be used.
At this point it is helpful to zoom out and get a thousand foot view of your business. Your business is split into two groups of functions as shown below. External functions, which deal directly with your customer while internal functions support the external functions.
When you first start your business, the head of each one of these functions is you! (Even Human Resources as you are an employee of the business!) You are filling in a lot of roles, which is why you so often feel like you are running in many directions and putting out fires all over. In order to work on your business you need to look at each one of these areas and determine how you can increase the quality, consistency and efficiency of the function while using less of your time.
The common ways include hiring, process building, and software implementation. Hiring is usually the first step. However, if you begin hiring employees with no process in place and don't build out a process the results can be disastrous. Don't be surprised when you start saying things like "They just don't do it as well as I could do it" or "By the time I show them how to do it I could have done it myself". These are both statements which indicate a broken business. Every business owner will feel these things, but it is important to move on and get a process in place that makes sure your employees can do it as well as you could and quicker than you can. When you setup a process the goal should be for you to know within 5 seconds whether the objectives of the function are being met. Knowing within 5 seconds will make it easy for you to look into a potential issue before it is completely broken. Let's look at a simple business improvement process.
Make sure that you setup a way to track whether the results are being met or not. If results are not being met you may need to either remove the most recent implementation or stack something else on top.
Here is an example for Sales:
Once you have completed this step the next step may be as follows:
In order to track this you may have the marketing company sending you ongoing reports or setup Google analytics to for you to review every Friday morning.
The idea is not to always be redoing the entire process but with continuous incremental improvements. Perhaps, the first hour of every day will be dedicated to business development. For a long time as your business grows if you don't make the time you will never have the time until something really breaks. It is really incredible how even one year of incremental improvements adds up to huge time savings, increased profits and reduced stress. At least once a year you should take a step back and imagine what your business will look like 5-10 years down the road as this will help drive your big process improvements and even the smaller continuous changes.
As you go through this process keep in mind that some functions are more critical for you to work on and some you can outsource pretty soon such as Technology, Treasury and Controller.
Pro-tip: It can be helpful to build out a process as you are doing the actual work. This way you don't feel like you are losing valuable time but you still improve you business for the future.
A common mistake with businesses is making rush decisions on implementing software. By rushing into a decision a business may find it spends a lot of money for minimal if any productivity gains and a lot of headaches. You want to avoid this so when it comes to software implementation it is important to keep in mind the following:
Working on your business is an ongoing process but well worth it in the long run. We have just scratched the surface so make sure to reach out if you have questions.
Happy Business Building!
Foundation Accounting provides integrated bookkeeping, accounting and CFO services to small business owners and individuals in British Columbia, Canada. The firm was founded to help small business owners and individuals gain financial clarity to make better decisions and minimize financial stress in their life. We are here to support small businesses each and every day.
Are you looking to gain clarity and remove financial stress from your life? Get a quote today.
Not ready to get started? Want to keep up to date with business and tax tips? Sign-up for our newsletter and follow us on social!