“By working faithfully eight hours a day you may eventually get to be boss and work twelve hours a day.” – Robert Frost
Business ownership is an evolution. This evolution has been summarized in blogs, books and whitepapers. For this message, we can look at it in three basic phases – Entrepreneur-Job-Business – with an emphasis on the latter two.
The ‘spark’ happens and a business idea is born. There are many different reasons why a person starts their own business – not all entrepreneurs are alike. For some, entrepreneurship is a ‘mindset’ that drives them to bring their vision to life. For others, entrepreneurship is a moment when they decide ‘I can do this’ and set off on their own. For others, entrepreneurship is more of an ‘investment’ mentality – what will my return on investment (ROI) be? Almost any entrepreneur would argue that their journey includes all three of those characteristics. Many business ideas die in this ‘spark’ phase or are reborn into another endeavor. Some progress into viable self-employment and business entities.
As the business evolves it may or may not make an overall profit just yet, but it does provide the opportunity for the owner to make an income – to support his/her family. When taxes are taken into consideration, a business owner doesn’t need to make the same income dollar-for-dollar as they did working for someone else to maintain a similar lifestyle. Maybe that milestone is reached or maybe they are earning more than they ever did. However, they have to show up every day or the business wouldn’t function. (OK maybe they can take a couple weeks off per year like if they had a… job).
The business owner must open the business each morning and close it each night. Many of the daily tactical functions are dependent on the owner – production, delivery, customer service, sales, and administrative duties are all dependent on the owner. There may be employees, but they largely ‘fill in the gaps’ left by the owners’ activities. The employees all report to the owner, because the daily work and procedures exist pretty much solely in the owners head. At this evolution point, the business owner pretty much owns a ‘job.’ There is no condemnation here, kudos to anyone who owns his or her own job – that’s a better situation than most. The daily responsibilities and requirements may be just as demanding, or more so, as working for someone else. But there is one all important difference – you don’t work for someone else. Many businesses exist in this status for their entire lifecycle; they provide income and wealth building opportunities, and take care of many families.
Some businesses progress to the point where the owner actually owns a ‘business.’ The difference is that the owner can separate himself/herself from the tactical activities for a period of time, or indefinitely. The ‘business phase’ implies that the owner can invest his/her time wherever they please – in strategic activities, in customer relations, in sales, or they can invest their time in their family – with shorter work days, shorter work weeks, longer weekends, and more frequent vacations. The business phase implies that there are trained and empowered managers who are able to run the business, there are documented systems that are routinely followed, and there are robust data collection, reporting, and communication processes that keep managers and the owner properly informed as to the activities and overall health of the organization.
Every phase of this evolution is something to be celebrated. They all represent America doing what America does best.
Though wouldn’t it be fun to sit on a beach with your family and when you have that ‘urge’ to check in – you simply need to pull out your iPad and click on the dashboard report – the one that your management team produced for your benefit (and theirs). Or, perhaps you call in at a designated time to get structured and ‘on point’ updates on what is going on. You would be free to ‘roll up your sleeves’ and work with the gang whenever you wanted or thought it was needed. But you would also be free to focus on what you love now that you own a ‘business.’ You and the business are separated. The business is now something that can be sold in whole, sold in part, or turned over to a next generation.
I once heard a colleague comment that he thought every business owner should act from the outset as if they are building a franchise. His point was that a business owner should always think in terms of getting the business ‘out of their head’ and into concrete tools and systems. A well functioning business needs systems related to hiring and training, production operations, customer acquisition and retention, all managed by a responsible and empowered executive team. You may never start a franchise, or sell your business, but if you started down this path you would have considerably more freedom, flexibility, and equity than you did when you owned a ‘job.’
So how close are you to the vision of the owner on the beach with his or her iPad?
Could that be a goal?
What do you need to do to get there?
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