Business strategy, Management and leadership
Do you work ‘in’ your business, or ‘on’ your business?
My initial question when consulting with any business owner is, “Is your enterprise a lifestyle business, or one that I would call ‘properly corporate’?”
There is a big difference between the two, especially when it comes to the business owner’s retirement and the value attributable to each type of business. A lifestyle business can effectively be defined as one that provides adequate income for the business owners but that carries little or no value (most probably because the income is generated and extracted predominantly by the business owners).
A ’properly corporate’ entity will normally be well governed with processes and carry value by virtue of its ability to generate income and profitability from those processes.
Working ‘in’ Vs. working ‘on’ your business
If the business owner works very much ‘in’ the business and is the driving force, then, although the business may be generating suitable profitability, it is unlikely that when the business owner wants to cease working, there will be any significant value attributable to such a business. Working ‘in’ the business may earn the proprietor a satisfactory income but without consideration of the end game, maximum value would be difficult to realise.
On the other hand, the proprietor who works ‘on’ their business and looks at the business itself as their product can generate a value for that business. The proprietor that is working ‘on’ their business will be establishing good corporate governance, good quality and accurate management information and strategies that are regularly considered and reviewed.
The question I am often asked is “How do I achieve that?”
How to work on your business not in your business
1. Make small manageable changes
A business owner’s perception is that large immediate changes are required to transform their business, but this is not the case. I often use the term ‘elephant burgers’ – it’s impossible to eat a whole elephant in one go but it can be digested in bite size chunks over a period of time. Initial reactions to this term vary, but ultimately when the penny drops, it can become a light bulb moment.
2. Delegate tasks and expand your team
Understanding your organisation structure is essential in making sure that processes run smoothly. Constructing an organisation chart setting out the responsibilities for each required post will give a comprehensive overview of the business and the responsibilities allocated to each individual.
Often business owners find themselves doing 1001 jobs that don’t allow them time to think about the bigger picture. Many proprietors are hands on in dealing with a significant number of required tasks. They may be stuck handling a customer support query or have decisions to make about the website design. Creating a forum to consider the ‘working on’ issues, delegating appropriately, and by raising action points for relevant team members will allow the growth plans to become reality. Bringing in professional help to assist with the creation and control of this task has helped many of my clients.
3. Create your goal post
For any business owner, it’s important to know the end goal of the business. Where do you want this business to go? Why do you want it to go in that direction? What are your personal goals? I.e. retirement, revenue, making an impact in a certain area? Once you have this clear goal, a business advisor can help you navigate your way to your goal.
Often a proprietor working ‘in’ his business doesn’t know that there is an alternative and that there is an opportunity to think about their own business in a different way, with a view to ultimately realising significant value. In the past, I have run seminars called ‘What you can measure you can manage’ which aim to give proprietors of SMEs the opportunity to understand how, with the use of strategies and accurate management information together with regular corporate governance, they can grow their business and significantly increase its value.
4. Time blocking
For a start-up, expanding the team may seem impossible, so if you are still having to get involved with a lot of everyday tasks, set a specific time in your diary each week where you will be undisturbed to solely think about the direction and long term goals of your business.
If you would like to arrange a free consultation to discuss your business, please email me at firstname.lastname@example.org or contact our business advisory team today.