Working in the Business vs. Working on the Business
Updated: Sep 14
Why do some business owners enjoy tremendous success while others fail miserably? Why do certain business owners feel in control of their business while others feel controlled by their business? Why are some business owners able to drive their business forward with relative ease while others feel driven by their business?
Sobering statistics: According to the Chamber of Commerce, only 40% of small businesses are profitable. Of the remaining 60%, half are breaking even, and the other half are losing money.
So why do so many small business owners feel like their business is running them instead of vice versa? Why the poor profit numbers? There are many reasons, but one stands out. I believe it is the difference between working in your business and working on your business. Michael Gerber, in his classic work The E-Myth, writes that many people go into business because they have a skill or talent they think they can monetize. They think their knowledge or experience is enough to carry them to attractive profits. Somehow all the tasks will get done.
Wakeup call! After a business is up and running, the challenges of bringing new customers consistently thru the front door while keeping those same people from exiting out the back door due to inadequate service, becomes a harsh reality and weighty challenge. For a while, you can keep all the “plates spinning” but without a clear operational process in place that works on the business, it’s just a matter of time before the cracks start to surface in the business itself, business owner(s) and the staff’s lives. Daily (10 – 15 minute “huddles” with direct reports), weekly (leadership team meetings), quarterly gatherings ((includes all staff and owners for a on-track/off-track discussion on the key business components) and annual meetings (owners/partners plan for evaluation and planning) will address issues in a timely matter and keep everyone rowing in the same direction.
Anyone who has been in business even a short amount of time comes to the realization that the business cannot run itself. Issues arise nearly every day that need to be dealt with in an intentional and effective way by the appropriate people. “Throwing” more personnel at the problem will not solve it or relieve the stress. An operational system must be installed that creates a rhythm of communication among everyone in the organization involving the right people at the right time.
It begins with you, the leader. Assess each team member to see if they “get it,” want it, and have a capacity to do the job. The goal should be getting the right people working in the area of their unique ability for 80% of the time or more. Getting the right people “on the bus” (your company) and sitting in the right seats (function) is paramount.
Clarifying your business’ mission so that everyone knows what they are aiming at and how their role contributes to accomplishing the overarching mission is vital. Identifying the core values unique to your organization will make addressing issues among team members easier and allow you to make decisions on significant opportunities much quicker. Ask yourself, is this decision under consideration in alignment with our core values or not? If not, move on. (See Resource tab on the Solas Wealth website for an effective Decision-Making tool we created for your use).
Part of the brilliance of the McDonald brothers was they systematized all the primary functions of their hamburger business so that an excellent product could be delivered consistently. Identify the primary activities that make your business run. Ask yourself, “If this activity were done to perfection, what’s the first step that needs to take place? Second step? Third, etc.? Those steps need to be documented and followed by all. This way even the person who must “fill in” knows exactly what is expected and how to do it.
If you would like to dive deeper into the operational aspects of your business and get the free tools you will need, go to eosworldwide.ocm and learn more about the Entrepreneurs Operating System. We have used it for years with fantastic results.
Honestly, for a while it will seem like you are working a second job as you implement these various steps, but you will wake up one day and feel the satisfaction of your business working for you rather than against you!