A Little Mistake That Cost An Entrepreneur His Business

Jul 26, 2010, Written by Sue Miley

I know it is really frustrating to own your own business and have less flexibility and free time then when you worked for someone else. There can be many causes of this, but one that is fairly common is that we become the main “technician” in the business.

Whether you have an accounting firm, delivery service, or counseling practice, if you are spending all of your time doing accounting, deliveries or counseling your business is probably suffering.

Spend 20-30% of Your Time Working On Your Business

We need to be spending at least 20%-30% of our time working “on” our business, not “in” our business.

Why?

If we are a small business, what can take so long?

The biggest problem occurs when you get behind on business management. Do any of these scenario’s sound familiar?:

I only write a couple of checks per week. I figured I could put in an accounting/bookkeeping process later. Now it is the end of the year and I can’t pull the information together for my taxes or to renew my credit line.”

I was working so much I didn’t have time or the need for marketing. Then when everything started slowing down and I could catch my breath, my cash flow dried up. I can’t afford to spend money on marketing.”

I had to hire Mr. Z. The last guy quit without notice. My gut told me Mr. Z wasn’t the right person, but I had a hole. If I didn’t hire him, I would be working even more hours.”

My new employee starts Monday. I can’t even stop long enough to figure out what to delegate. I wish we had completed those training manuals. Now half of my day will be eaten up on Monday to even get this new person started.”

If any of these, or a variation of these, sounds like you, these are issues that can be prevented by working “on” your business. The idea is to put together consistent business processes before you need them so you will be ready when you do need them.

The Sooner You Carve Out The Time, The Longer Your Business Will Last

It is much more difficult to establish strong systems once your business is bursting at the seems.  You have less time.  Processes and information are a mess and have to be cleaned up before a new process can even be established.  The longer you wait, the more people are usually involved in the transition.  And we all know how people feel about change!

As a small business owner, making it a routine to spend 20-30% of your time working “on” your business now, will not only save you time and money later, it may actually save your business! 

Someone Else May Run Your Business After You Fail

I have a family member that ran his own business for several years.  Sales were great and his business was building a brand name.

He didn’t have time to work “on” his business.  A few years of hard work and sweat later, he had to turn his business over to someone else because he didn’t pay correct taxes or maintain proper accounting records.

When the time came to pay the back taxes, he didn’t have the money.  The bank wouldn’t lend it to him because he couldn’t present financial statements and his credit was shot.

He had to move on, but 20 years later the person he turned this business over to is still running it!

How would your infrastructure hold up if you quickly doubled sales?  Could you handle the business with the same quality and responsiveness that you had envisioned when you started your business. 

Start now and develop a 3 month plan to incorporate time into your schedule to spend working “on” your business.

What works for you?  Please share your suggestions for making time to work “on” your business.

Reader Interactions

Comments

  1. Brad Harmon says

    The book I recommend for anyone starting a business for the first time is Michael Gerber’s The eMyth Revisited. A friend of mine told me to read this book when I was thinking of opening up my CPA firm. I bought it, but sadly it sat on a shelf collecting dust.

    He talks about our struggle to balance the technician, the manager, and the entrepreneur in each of us. It fundamentally changed my view of what it means to be a business owner versus being self-employed.

    • S_Miley says

      I love the eMyth. For awhile I gave copies to new clients. The part I really appreciate about the eMyth is the nobility it applies to systems. Systems aren’t the fun, creative part, but they create a foundation than allows us to be creative. Invaluable stuff.

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Sue Miley

Sue Miley MBA, MA, LPC helps small business owners build successful businesses on a foundation of Christian values. After 20 years in business, and 10 years as a Christian counselor, Sue uses a combination of faith, business and psychology to help clients in business and in life.

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