Do You Work On Or In The Business?
As the owner of a small business you have just returned from a well-deserved holiday.
You quickly call a team meeting to announce to all team members that you are going overseas for 12 months and unable to be contacted.
You are entrusting your team to run and grow your business whilst you are away.
What do you think you would return to in 12 months? Would your business have declined or even closed down? Would you return to a bigger and stronger business?
Unfortunately, the answer for most small businesses is that they would return to a business which would be in a complete mess. This is because most business owners tend to work in the business rather than on the business. Without the continued hard work of the business owner the business would not function.
A business where the owner works ON the business displays the following characteristics:
- The business is systemised with procedures and processes and manuals in place for all activities of the business
- The business owner/s have a vision of where they wish their business to be in five years. This vision will be shared with the team
- Continued training, both technical and people skills is undertaken by all team members
- Strategic planning sessions are undertaken at least twice a year
- The business owner/s do not work long hours. They don’t need to as they are surrounded by well trained staff with the right skills and expertise to complete all tasks
- Key performance indicators (KPI’s) are in place recording and measuring the ‘heartbeat’ of the business. KPI’s may include average customer sale, number of customers and for a service business may include hours available, hours charged, productivity per employee and job write-offs.
- Detailed budgets are in place with board meetings taking place every month with actual figures compared to budget and appropriate action taken where necessary. If your business is small, you should still have a regular meeting, maybe with your spouse or your accountant, to discuss the performance and future direction of the business.
- A business plan in place dealing with the operational, human resource, marketing and financial areas of the business.
- The business owner/s have goals and take strategic action to achieve and surpass their goals.
You may question all this as being too hard. Well simply have a look at your competitors and pick out the successful ones. They are the ones doing these things.
Ask yourself what would happen if you disappeared from your business for 12 months. A business where the business owner works on the business is worth far more than a business where the owner works in the business.
It is time for a change?
Disclaimer: The information provided in this article is of a general nature only. You should seek specific advice from your accountant / financial adviser who will assess your personal situation.