“Work on your business, not just in your business.” We’re all familiar with the phrase. But what does it really mean?
Getting your business off the ground is no easy task. As a business owner, you need to be able to transform your business from a fledgling startup to a more stable, self-sustaining source of income.
What it means to work ON your business
If you’re in the habit of checking on your employees and micromanaging every single task, you’re working IN your business. However, if you devote most of your time planning and implementing changes to maximize your profitability, then you’re working ON your business.
Small businesses usually start off by working in their business during the first two years, but ultimately, they should be able to work on their businesses on a strategic level. We can tell if a business has already matured if the CEO spends most of the time growing the company instead of getting invovled in the day to day operations.
To put another way, if you can take a month off on a holiday without fear of losing your business, then you’ve already succeeded working on it. As simple as it sounds, the process of getting there doesn’t come easy. Most business owners start out working in the business before getting off the ground.
The Two Levels of Leadership
There are generally two levels every CEO must lead and manage his or her employees. The first is necessary but the CEO should strive to spend most of his or her time on the strategic level.
- Operational Level – deals with routine tasks such as maintenance and upkeep, customer engagement, production, distribution, and sale of goods and services.
- Strategic Level – deals with the higher level of managing your business with some long-term planning. Strategic level planning usually includes such activities as marketing strategies, customer acquisition, customer retention, brand awareness, promotion, ads, allocating resources, and acquiring new assets, all of which are geared towards expansion or getting ahead of the competition.
Steps on how to start working on your business
Some of the best practices to ensure your business is successful include hiring the right people, delegating tasks, creating systems for your business, managing cash flows, and using technology and innovation to fast-track your business and keep up with a constantly changing environment.
Hiring and training the right people. Getting the right people on board can be very difficult and costly, particularly during the initial stages. You’ll probably start off with just a handful of inexperienced undergrads doing mostly clerical jobs and other minor tasks at minimum rates. Some start-ups cut the cost even further by outsourcing some of these tasks offshore, usually from developing countries. As your business gains momentum, you can start hiring and training the big guns and take bigger steps onwards.
Delegating and managing tasks using the 80/20 rule. Business owners are often amazed at how much tasks they can get rid of using a simple technique also known as the 80/20 rule (Pareto Principle). List down all the tasks in your daily routine and cross out the ones that can be done by people other than you. In most cases, you’d be left with only 20%, or less, of all the tasks, usually the ones you alone can do. Identifying these tasks is the first step in delegating and managing most of your routine activities. Hiring and training the right people will take up all of the tasks you’ve left out.
Creating systems for your business. Standardizing your business process in such a way that anyone can run the business in your absence is the real essence of working on your business. Your systems serve as the “blueprint” on how to properly run your business. Think of it like a franchise where licensed owners can run the business using the company’s playbook.
Attention to detail is key, from job descriptions, assigned roles, workflow, timetables, product specifications, the whole nine yards – everything must be properly documented and serve as your company’s operations manual.
Managing your cash flow. Careful use of resources is vital to business growth and survival. Most businesses, even the big ones, go out of business for putting their money in the wrong places. Cash flow management should be part of your business plan at the outset, and continuously work on it as you grow your business. As a general rule, you should aim at speeding up the inflow while slowing down on your outflow. Running out of cash can quickly put you out of business.
Using technology and innovation. Technology enabled businesses to automate most of their routine tasks, hence cutting labour costs and speeding up the process dramatically. In today’s highly competitive environment, it’s the only way you can have hope of growing your business. Much have already changed on how we do business nowadays, and we need to innovate our strategies more often.
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