Being your own boss is great but if you don’t work, you won’t make money.
While your business is a source of income, it hasn’t become an asset you can
sell because without you there is no business. You need to build a business
that keeps working when you’re not there.
From self-employed to manager
Start by writing a comprehensive business
plan mapping the direction you’ll take and the systems you’ll put in place
to get there. Systems create consistency, which is the key to strong business
performance. Importantly, they don’t need you to run and can be taught to your
team.
The kinds of systems you create will depend on your industry, but there are
some every business needs:
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Accounting systems. Track cash flow and accounts receivable, pay
staff and suppliers, and manage tax obligations.
-
Customer service systems. Develop checklists and protocols for
everything from answering the phone, to greeting a new customer, to making a
sales call. A complaint-handling process is essential - and a great chance to
find out what customers think.
-
Customer management systems. The more you know about customers, the
better you can service them, target your most profitable clients and track
prospects to assess marketing effectiveness.
-
Delivery systems. If you can’t deliver consistently, your customer
is going to go elsewhere. Your staff have to understand your quality standards
and how to deliver on them, every time.
-
HR systems. A human resources (HR) system covers everything from
recruiting excellent people, to training them, monitoring their performance and
providing feedback.
With your systems up and running, you can begin handing over day-to-day
responsibilities to your team. That’s when you know you’ve made the step from
self-employed to manager.
From manager to owner
As a manager, you oversee the systems you’ve created but you also need to
step back and develop the business.
Rewrite your business
plan with new goals and assumptions. Refine your service proposition,
identify your most profitable customers and find better methods
to market to them.
Look at the key
numbers in your business and find ways to drive them higher. Think about
how you can:
- Generate more leads and convert them into sales
- Increase the number of sales from each customer
- Increase the dollar value of each sale
- Increase margins without losing customers
Try a number of new ideas simultaneously and measure results, so you know
what works.
Continue developing your team and building
a business that works without you. With your business generating a healthy
profit and your team running independently, you’re ready to hand over the
management reins and start acting like an owner.
From owner to entrepreneur
You’ve made the step to owner when you can focus on developing your
business and increasing profitability.
What return is it achieving? What’s its potential? Can you leverage your
success by expanding further? If so, should you seek an equity partner or borrow
money?
If you feel you’ve developed the business as far as it can go, or as far as
you want to, you can choose to take the next step, to entrepreneur. With
one successful business established, it might be time to leverage your capital
to invest in a new one.
