Entrepreneurs like to get into the thick of things.
They jump into an opportunity, build an appropriate business structure, roll their sleeves up and get to work.
The cut-n-thrust of the “coalface” is often what drives them. This can be a serious mistake.
Business success is about “owning” a business, not running it.
All businesses go through a reasonably consistent lifecycle. Take your average entrepreneurial startup. Often it is a “one man band” (excuse the sexism implicit in that phrase): the owner/founder IS the business – s/he does all the work.
As the business matures and grows, s/he may hire additional staff, but they perform mainly administrative duties, allowing the owner/founder to concentrate on the income generating work.
As the business grows further, the owner/founder may bring on more staff, some of whom may perform income generating tasks, but the owner/founder is still the driving force, performing the lion’s share of the income generating work.
The company grows, and more employees are hired.
Eventually, a business will encounter a cross-road, or, as I call it, an inflection point.
At this stage, the owner/founder will start to back away from the coal face, and start delegating tasks, adding infrastructure (in the form of processes, procedures and specialist employees) that allow the owner/founder to stand back a bit from the day-to-day running of the business.
This maturation process continues, until the owner has little or no day-to-day involvement in the running of the business – s/he merely draws income/profits/dividends from the business.
This is an important lifecycle, though not in the Michael Gerber e-myth sense of “working on the business, not in the business”, nor the Robert Kiyosaki Rich Dad, Poor Dad sense of leveraging your business acumen to generate passive income.
It is creating a business that, while infused with a culture that reflects your specific views and personality, exists independently of you.
Where is your business today?
I use a (somewhat morbid) “bus test” – if you were hit by a bus today, what would happen to your business tomorrow?
On one side of the inflection point, it would sound the death knell – your business would collapse in your absence. On the other side of the inflection point, your business could survive, if not flourish, depending on how far you had progressed it.
Smart entrepreneurs don’t make themselves the “centre of gravity” in their business. They realise that the world is full of opportunities, and they may want to jump at short notice at the next opportunity. To give themselves this flexibility, they design their businesses from the ground up to thrive without them.
I am thinking of getting a poster printed to hang in my office. It will read: “Watch out for the bus!”.