Self-employed to entrepreneur

As your business grows, your role will change dramatically. You’ll need to leave the day-to-day operations to others so you can focus on the bigger picture. But how do you make the journey from self-employed to entrepreneur?

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:

• 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.

• Important information
  As this advice has been prepared without considering your objectives, financial situation or needs, you should, before acting on the advice, consider its appropriateness to your circumstances. All products mentioned on this web page are issued by the Commonwealth Bank of Australia; view our Financial Services Guide (PDF 59kb).