“Work ON your business instead of IN your business.” What does this phrase mean? If you know what it means, you may have difficulty understanding the benefit of working ON instead of IN your business. And, if you see the benefit of working ON instead of IN your business, you may have difficulty accomplishing this feat. This post will answer all three questions.
What is Working On instead of In Your Business?
I want you to imagine a pump operating in a pond. The pump creates a beautiful water fountain by drawing water from the pond and pumping it into the fountain mechanism, which sprays water into the air. This process is repeated perpetually until the pump breaks. You then repair the pump and turn the switch on, and the operation continues as it had before. In simple terms, you are working on the pump.
Let’s imagine another machine. This is a money-making machine. The inputs to this machine are 1) money and 2) time. There are two outputs: 1) profitable cash flow and 2) beneficial products and services to your customers. When most business owners first start, they have little money and a lot of time. Therefore, they tend to be the primary worker in their business. This is working IN your business.
Once your business gains momentum with a steady flow of customers, you hire other workers and manage those workers. You are still working in your business, but others are doing most of the direct work on behalf of your business.
At some point, you hire managers and become the CEO, creating your company’s vision, watching various characteristics of your company’s operation, and then tweaking things as you go. You may care about customer satisfaction, profitability, employee satisfaction, and product quality. At this point, you are officially working ON your business.
Why is Working ON Your Business Instead of IN Your Business a Benefit?
Let’s go back to our fountain pump illustration. Let’s say you are one of the water molecules running around the fountain loop. You run through the pump, then to the fountain, get sprayed into the air, and then flow back through the pond to the pump. Now, the pump breaks. Who will fix the pump?
In the small business reality, you’ll try to do both: working in your business and fixing your business when it breaks. This dual role works if you have few customers. As soon as you grow, hiring others to do the work is essential. If you don’t, you’ll forever be working IN your business.
There are several benefits of working ON instead of IN your business:
- Your perspective will be of your entire business machine instead of one aspect of your business at a time.
- You will own and run a business instead of working in a job.
- Your business can grow because you’re not the bottleneck.
- Your employees will get a leader rather than an over-paid co-worker.
- Your income will be substantially higher.
The most significant benefit is that you’ll be in control. Can you imagine the water molecule trying to troubleshoot and fix the pump? Of course not. If you want to control your business, you must be outside of its workings.
Why is Working ON Your Business Instead of IN Your Business so Hard?
As luck would have it, most good entrepreneurs are good workers.
As I’ve coached business owners they go through four stages from working IN to working ON their business.
Lone Worker
The first stage is the worker, who works out of necessity. With little money to hire someone, you must do the work to earn money to hire someone else.
Even when money is available, you’re tempted to remain a worker. Why? Because you’re used to it. When you hire someone else, you micro-manage that individual to get them to do things precisely as you would’ve done them as the worker.
Co-Worker
The second stage is to allow new employees to do a specific role in the company while you perform a role you feel you’re best at performing. For instance, the new worker may directly serve the customer, while the owner will sell and market for the company.
The owner stays in this role, often believing that a new employee cannot fill a specific key role in the company.
Manager
The third stage is managing employees within the company. You hire and conduct performance reviews for staff. Finding a replacement is challenging when trying to transition out of this role. You want someone who understands the entire business, doesn’t cost a fortune, and is preferably an employee who already works for you.
CEO
A Chief Executive Officer (CEO) is responsible for management, large financial decisions, investment opportunities, and being the entrepreneur they had always hoped to be.
Business owners face resistance at each transition point. Even when they transition, they try to transition back. The quicker a business owner can successfully transition through each growth point, the sooner they will experience the benefits of working ON their business instead of IN their business.
How Do You Work ON Instead of IN Your Business?
We’ve discussed the advantages of working ON instead of IN your business. I want to now share some tricks for making these transitions.
Financial Plan
A 10-year financial plan shows the company’s economic growth. By reviewing this plan, a business owner sees that cash is present to hire new employees to backfill their old roles so they can move into roles with higher responsibility. This planning and expectation allow the business owner to have an automatic trigger that helps them prepare for each transition point.
For instance, if the plan shows 5 employees at $500,000 in revenue, the owner must be the manager. This staffing must be estimated as part of the staffing plan in the 10-year financial plan.
Leadership Training
If you’ve never managed people, the first time can be challenging. Without formal training, you will resist becoming a good leader, which will prevent you from achieving the proper growth of your business. When you understand how to lead people responsibly, you’ll be much more likely to embrace the leadership responsibility required to transition through each growth point.
Leadership Matters is an online training program I have created to teach the fundamentals of leadership.
Hire a Business Coach
A coach sees your business objectively, while you see it from the inside. Before you can work on your business, a business coach will give you an objective view of how and when to transition to grow.
Jeff Schuster is the author of this post and is a business coach with Mechanics & Mindset Business Coaching. Jeff has published several more blog posts, podcasts, and videos on business mechanics, mindset, and coaching. Please set up a complimentary coaching session with Jeff if you’d like to share your business situation and gain insight into what may help you grow your business to the next level.
