I recently talked with a very well paid business analyst who works for a billion-dollar company. He makes good money and has a stable career path. But he wants more. He wants to be self-employed.
Being self-employed is great. You only have to work half-days. You can pick whichever twelve-hours you want.
His comfortable salary and quarterly bonuses are nice. But he wants more. He reviews financials for a living, and believes he can vet a business and make a great purchase.
He's right, but in a way that's all wrong.
You see, he keeps trending toward businesses that will own him rather than be owned by him. This is a very common mistake made by the self-employed. I can recognize this mistake because it's one I've made myself.
The self-employed trap regularly happens to very smart people. They seek freedom. They want to be self-supporting. But they end up designing a job for themselves where they are only called "boss". THE REAL BOSS IS THE BUSINESS. And it is a vicious taskmaster.
Self-employed and wondering if you're owned by your business? Here are some signs that you're only called boss:
- You are the business. When customers think of your business, they think of you. And they count on you to deliver the goods.
- You're still trading hours for dollars. When you stop, the business stops. When you're not working, the revenue stops flowing.
- It's feast or famine. You work non-stop while contracts last and you're out of work when they end.
- You're scared to say no. Turning down a job or firing a customer is terrifying. You never know when the work will end.
- You most likely do your own bookkeeping. Lack financial controls and accounting processes.
- Cash flow feels like a roller coaster ride and it's the end of the year before you know if you've made a profit.
- Most of your time is spent working in the business. You've got almost no energy to work on the business.
Recognize any of these symptoms of the self-employed? If you're happy with your current lot, don't change. But, if you're ready to become the real boss, use these three steps to stop being owned by your business.
1) Replace Control with Controls
People who are owned by their business over-value personal control. They involve themselves in everything. Slowing down their business and discouraging their employees.
Controlling everything yourself damns you to the realm of the self-employed.
Want your business to grow beyond you? Transition from being the source of control to providing systems of control.
Business controls are the systems you put in place to ensure that the right things are getting done by the right people at the right time and in the right way. Controls can be everything from regular KPI reporting to HR checklists.
The three most common types of business controls are:
- Automatic controls work without someone having to remember to use them. Your CRM and financial software systems, standardized contracts, data backups, and HR policies are all great examples of Automatic controls designed to protect you and your business.
- Procedural controls provide everyone in your business with an established path to consistent results. They deal with things like reviewing and promoting your staff. How cash flows are managed and who manages them. And what concessions salespeople can give with out seeking management approval. Procedural controls are the foundation for any growing business.
- Visible controls provide a visual snapshot of how your business is doing at any given time. Controls like KPI dashboards, departmental budgets, and sales pipeline reports let you know when your doing great and sound the alarm before things get out of hand.
Truth is, the more you personally control your business, the more trapped you are inside your business. Want to escape the realm of the self-employed? Replace control with controls.
2) Hire Roles not People
If you're like most entrepreneurs, you leveraged your personal network to launch your business. Inviting close personal friends and family to wear multiple hats in order to help you bootstrap your way to success.
But as your business grew, something significant happened. It needed fewer generalists and more specialists. Now, rather than providing you with expert advice and execution - your team keeps looking to you.
The people who helped you get your business off the ground may now be holding it down.
You haven't verbalized it. But you suspect that the people who got you off the ground may now be holding you back. So what do you do?
Here are four exercises to help you stop hiring people and start hiring roles.
- Complete an Organizational Audit. Every organization is perfectly structured to get its current results. If you don't like your results. Chances are your organizational structure is insufficient to support future growth. Good people can flounder in bad structure. The first step in improving performance should be evaluating structure.
- Prioritize your Loyalties. Loyalty is a great quality. But a business owner must make sure their loyalties are properly prioritized. Loyalty to a single employee over all other stakeholders does more harm than good. Create a priority list of where your loyalties lie. Make sure your intellectual, physical, and emotional health aren't at the end of the list.
- Create a Job Description for Every Role. It's amazing how many employees don't know what is expected of them. In case you're wondering, creating JD's for your employees is your job. Once you have a working org chart, you must create a clear job description for every role your company needs. Don't start with your employees. Start with your org chart. Create a job description for every position your company will need in the next twelve months. Need a template? Here is the Job Description Template we use at Pilot Fish.
- Reorganize, Fire, and Hire. Most of your employees will stay in their role or transition to a different role during a re-org. But not everyone will make the journey. Firing employees isn't fun. But neither is continuing to languish with lackluster results. If you don't have the constitution for this job, then outsource it. Sometimes you have to let go of the past in order to create the future.
Organizational Audits can feel overwhelming to many business leaders. A good business consultant can help you gather perspective, create a plan, and then execute. There are many great consulting companies who can help you with this. I recommend these guys.
3) Build a Process for Everything
At my last company, I had our Process Improvement Directors face printed on a t-shirt that I wore to the office. He was dressed as Yoda with a caption that read, "Use the Salesforce."
You don't have to wear a t-shirt. But you do need to champion process improvement in every area of your business.
Floundering companies approach every problem likes its the first time they've dealt with it. Customers get a different experience depending on with whom they interact. And everyone looks to the owner for direction.
Want to stop being owned by your business? Then create an SOP (Standard Operating Procedure) for every task in your business. Here are some tips for creating a SOP culture.
- The Leader must Champion Process Improvement. Your people won't embrace process improvement unless you do. Wear a t-shirt. Coin a phrase. In previous companies, I've used "If it isn't on paper, it doesn't exist." and "GTSOP (Get that Sh!t on Paper)" If you want to scale, you must embrace process improvement.
- Create Workflow Charts. A picture is worth 1,000 words. A business process is a collection of linked tasks which find their end in the delivery of a service or product to a client. Your team needs a visual representation of every process they are to follow. There a plenty of great tools. (I use MSFT Visio but there are plenty of great, less expensive alternatives.
- Measure and Refine. The correct process will deliver a consistent product or experience every time. When a challenge arises, look to the process. Where did it break down? Does it need improved or does an employee need training. In the end, a business has People, Product, and Process. Get the process right and your product and people will follow.
It's important to note that not everyone is process oriented. In fact, many entrepreneurs hate standardized process. If feels restrictive and boring. Here's the thing. If you want to stop being owned by your business, make process improvement someone's job. Then discipline yourself to follow and champion process. It's key to growing your business and getting your life back.
I hope my business analyst friend will pay attention to this article. He may or may not. But you can.
This "owned by the business" phenomenon happens all the time. Some businesses just don't scale. If you're in one of those markets, then you should sell. (Maybe you can sell to my business analyst friend?)
But, if you're reading this article, and you believe you can scale, then embrace these three steps.
If you're not increasingly experiencing freedom as one of the fruits of your business, then you should consider a change. Your life is too valuable. How's that for a blanket statement to make you warm and fuzzy inside.
Thanks for reading. Keep on leading.