Owning your own business and being your own boss is part of the American dream. According to the Small Business Administration, there are over 27 million small businesses in the United States, and between 60–80 percent of all new jobs created are attributed to small businesses. When you start out as a small business owner, most of the time you are the small business. But as time passes, it is important to make the necessary transitions to begin working on your business instead of in it. So what are these necessary transitions?
Too often, entrepreneurial businesses are working on a shoestring budget that doesn’t afford additional employees or business partners. All of the decisions—sales, marketing, accounting, customer service and back office processes—are then your responsibilities. At this stage, you are the Business Doer, which means you are doing everything. As daunting as it is, this is an important stage because you are learning everything there is to know about “doing” your business. In fact, this stage is so daunting that 50 percent of entrepreneurial businesses never make it past this stage.
When I launched my talent management business, I remember answering phones, meeting new customers, training employees, designing ads for the local newspaper and writing checks for payroll—all on the same day. I was consumed by work that had to get done. In those lean years, my favorite saying was, “If it needs to get done, look in the mirror!” I worked to the point of exhaustion. Thankfully for me, the Doer stage lasted only three years!
Ideally in the Doer stage, you should document all processes required in the doing of the business so that, when the time arises, you can train your new hires how to do the portion of the business that you have relinquished. You should look at processes and tasks that you perform on a regular basis, and develop systems for them.
What is a system? A system is a documented method to perform the task so that it is repeatable and produces quality output. These systems should be automated as much as possible to reduce the time required and increase the output. The practice of writing down each task or process is called Job Mapping. For example, you have a weekly newsletter for your customers, and you want to create a system for it. You should document the steps you use to create the content and find the photos plus the steps for sending it out. Once you have it documented, then you can delegate the process to a new hire to see if s/he can follow the steps and create the expected output.
As the business grows, the owner will need to navigate even more transitions to allow the business to continue to grow and flourish. For most business owners, these transitions are very difficult because a growing business has many competing needs and urgencies. If you are unable to make the necessary ownership shifts, the growth and survival of the business will suffer. You can expect that the days of ownership are long and, in the early lean years, often with scanty reward.
Depending on your industry, the speed of business growth will determine when you should progress to the second stage, which is the Business Manager. This is the time that you can make some hires, but it’s important to make smart hiring decisions. Smart hiring decisions mean you are hiring people with skill sets that complement your weaknesses. The length of time in this stage is determined by the business owner’s personal growth and business acumen. To stay in business and grow, you will need to learn how and when to delegate job functions.
Too often, business owners become overwhelmed by the amount of work to be done, either because they have made a bad hire or the hire is not used effectively. To navigate through this stage, I have taken business certificate courses at Dartmouth Tuck School of Business and New York University Stern Business School. These programs provide the skills and confidence needed to move through this stage successfully.
In today’s highly competitive global business environment, business owners will have to focus on their personal strengths in order to outsmart, out-problem solve, and outperform current and future competitors. For example, you really like to network and meet new prospects, but don’t like to keep up with monthly reporting. Let’s face it, you are always going to happily do the things you like to do and put off the tasks you dread doing. Hire smart, and have someone more qualified to do the tasks with which you struggle. Consider a local part-time employee, a virtual assistant or an outsourced solution.
The solution is going to be based on the type and the size of the task to be outsourced. If you are looking for someone to manage your workforce and handle training and development, a more comprehensive solution is a better choice. In this stage, you should delegate most of the day-to- day business functions. If you hate the day-to-day bookkeeping, then hire a qualified bookkeeper to manage this portion of the business. Use your Job Mapping process to show them what you have done in the past and what your expectations are moving forward. Delegating does not mean that you no longer are responsible for that job function. As the business owner, you remain responsible for the accuracy of all business functions, so you must inspect what you expect.
In your role as Business Manager, there are several key productivity indicators (KPIs) that you should keep your eye on to ensure your business’s success. One critical KPI is your money. Create process controls so that you know where, when and how your money is being spent. And never delegate the signing of your business checks at this stage of your business.
As your business continues to grow, you will hire more people to meet your customers’ needs and to get things done. Depending on the industry, ideally you should have no more than five to seven people reporting directly to you. Once you have more than seven employees reporting directly to you, you will need to hire a manager to allow you to transition to your new role of Business Leader.
As the business leader, you are responsible to coach your people to achieve your expected level of business excellence. Talking with your team, explaining the reasons for your decisions and showing them your expectations is key to your business success. Your task at this stage is to bring cohesiveness to your team. Remember to reward your team for work well done. Give complements honestly and freely. Let them know that you care about them, and they will care about your business. Even through these cost-cutting years, there are ways to create an environment of inclusion among your workers. I have used potluck lunches and pizza Fridays as ways to encourage camaraderie among my team. Set high standards of excellence, yet don’t be afraid to laugh and have fun, too.
Use your unique strengths and abilities to support your team and your business. Never delegate face-to-face contact with your customers or your frontline workers because each will keep you grounded on the real issues in the business. The economy and the overall business environment are constantly changing, and your business needs to react to those changes. In addition to those changes, our lives and lifestyles are changing as well. Review your business objectives and goals quarterly to make sure they align with the business climate and any personal changes in your priorities.
I enjoy being a small business owner and assisting other business owners to help their businesses thrive. Too often, I see business owners letting their businesses take over their lives. Don’t let that happen to you. By creating systems, delegating and coaching your team, you’ll be able to spend more time growing your business and less time working in it.
