Worker to Entrepreneur: Brooke Grows Her Business with Coaching

To grow your business, you must stop doing the work of your business. Healthy business growth requires a business owner to start out as a technician doing the work, then move on to managing others to do the work for you, duplicate your recipe for success, and become an investor through selling or not working in their business. Many small business owners get stuck at one of these growth transitions and never grow their business to that next level.

Learn how Brooke learns to transition her interior design practice into a thriving business that replicates her unique talent with the help of a business coach.

Listen to this story instead of reading at the MMBIZCAST podcast.

Brooke is an interior designer and felt she hit a growth ceiling in her practice. She struggles to understand how to take her million-dollar business to the next level.

Brooke felt she had done well growing her design business, Brooke’s Designs, to over $1,000,000 in annual revenue with only twelve employees. It had been two years, and she was continually fearful that she would lose the ground she had gained over the past decade.

She remembered when it was just her. She was an interior designer with some great ideas and got some traction with a few customers. Her customers loved her designs, and she continued to gain popularity. It wasn’t long before she had to hire an administrative assistant and a few helpers. Customers loved her designs and her ability to refurnish and decorate a house within a month. She now had four other designers, four staff who moved furniture and hung pictures, a few administrators, and herself.

She felt like she was at an impasse. If she hired more people, she would not have enough work for them to do. She could not take on more work unless she hired more people.

While she was proud of her million-dollar business, she didn’t seem to make much more profit than when she was on her own.

Brooke remembered meeting a business coach at a recent networking event. He called himself Coach Russ. Maybe he could tell her how to make her interior design practice more profitable.

Brooke met Russ at his favorite coffee shop. They got their coffee orders and started chatting.

Brooke decided to talk to Russ about her dilemma, “I just don’t know what I’m doing wrong. I’ve successfully grown my interior design practice but feel like I’m not really doing much better financially than I did when I was on my own.”

Russ asked, “What kind of profit are you making with your current practice?”

“I’m making $100,000 in profit with $1,000,000 in revenue.”

“That’s respectable. What did you hope to make?”

“I thought I could do a lot better. I am doing okay, but I was making $200,000 per year when it was just me.”

“How much work do you perform yourself in your interior design practice today?”

“I do all the high-visibility designs and help with hiring and firing employees.”

“Interesting. Do you want to continue to do the designs yourself? Or do you want to grow a business?”

Brooke looked confused, “I don’t understand. Why must I choose one or the other?”

“You don’t have to do anything. However, it’s been my experience that a business owner either wants to grow a business; or they want to practice their profession while they surround themselves with helpers. If they want to practice their profession, they’ll naturally be limited in how much they can grow. Does that make sense?”

“Are you saying I will never be able to do any better than I’m doing now if I don’t grow a business?”

“Define BETTER.”

“I suppose that by BETTER, I’ll grow to two million dollars in revenue and be able to sell my company and retire.”

“Got it. Then, my answer to you is NO. You will not be able to do any BETTER than you’re doing now if you don’t grow a business.”

Brooke was shocked. She thought, ‘Russ is some kind of business guru. Why couldn’t he tell me how to grow my business? And why was he so negative? I’d probably pay him big bucks if he could tell me how to grow my business. What’s his problem?’

After a pause, Brooke asked, “Aren’t you a wise business coach? Why can’t you help me?”

Russ responded, “I can help you grow your business. I cannot help you grow a business where you insist on being its key performer.”

“I don’t understand. Are you saying that I’d need to give up doing interior design to grow my business?”

“Not exactly. I’ll tell you what. Give me your most recent financial statements and complete the questionnaire I give my first-time business owner clients. I’ll schedule a discovery session with you. We can dig into your situation in more detail.”

Brooke felt like Russ was trying to get her to agree to coaching without any promise of being able to help her in any way. But what was there to lose? It was a low price to determine whether she could move forward or not. Brooke agreed to Russ’s terms, and they scheduled a discovery session for the following week.

Brooke and Russ met in Russ’s office. There, Russ took a lot of the information Brooke had given him and created several sketches on his whiteboard. They both sat at a small round table directly in front of Russ’s desk.

After the typical small talk, Russ started, “I want to know the answer to a question. Do you want to be an interior designer, or do you want to lead an interior design business?”

Brooke thought this was as ridiculous as their conversation in the coffee shop: “I want to do both.”

“You can’t do both. You can do one or the other. Which will it be?”

“I disagree. I’ve grown my interior design business to a million dollars per year… and I’m still doing my designs.”

Russ could see that Brooke needed some convincing. He pointed to one of his sketches on the whiteboard. It was a sketch of an organizational chart of Brooke’s employees.

Russ pointed to a group of boxes that were supposed to be the designers Brooke hired. “What do these people do?”

Brooke smiled, “They’re my interior designers. They do designs for our customers.”

Russ smiled as he pointed to Brooke’s position as manager, “What does this person do?”

“I manage my team and perform interior designs for high-visibility clients.”

“No, you don’t.”

Now, Brooke was indignant, “Pardon me! I think I know what I do.”

“Brooke, for as long as businesses have existed, there’s been small business owner role confusion. I want to describe your company, and I want you to correct me wherever I go wrong. Deal?”

“Sure.”

“You work with your other interior designers. When you have a high-visibility client, you do the work. When you have an average client, you give that client to your other designers and they do the work. Right so far?”

“Sure.”

“Your company operates like an ad-hoc interior designer pool under your brand name. Your designers do their own thing and are too afraid to go out on their own because you help them get clients. Is that right?”

Brooke seemed upset at this point. Russ seemed to be saying that any of her designers could work on their own and probably would be better off than working for her.

She barked, “Look, Russ. I wanted some helpful advice from you… not insults!”

“Look, Brooke. I think you’ve done a great job with your interior design practice. Very few interior designers have created the kind of success that you have. However, I feel we must start off with a truthful foundation. I can’t help you if we don’t start from the right place. I believe that your interior design practice operates as a group of independent interior designers, helpers, and administrators. It’s not what I would call a genuine business.”

Brooke calmed down. “Okay. What would make my interior design practice a real business?”

“I’m glad you asked. You have a knack for interior design. You’ve said as much. You say that you are the one who will take on your high-visibility clients. You give your other clients to your pool of designers. To become a BUSINESS, you need to figure out what makes your design talent so special and package it.”

“What? How can I PACKAGE my talent?”

“If you were to sell your practice someday which is what you say you want to do, would you still work in the company after it’s sold?”

Brooke saw what Russ was saying. If she was so special that she needed to handle all of the high-visibility clients and wanted to leave the company, then her company wouldn’t be able to serve them, and it wouldn’t be worth as much to a buyer.

Brooke responded, “I see what you mean. How can I convert my current practice into an interior design BUSINESS?”

Russ smiled, “You just took your first step. Realizing why you don’t have a BUSINESS will help you create a REAL business. Next, you need to stop doing interior design for high-visibility clients.”

“What? I love interior design. Why should I stop?”

“Do you think Michael Dell or Bill Gates like programming computers?”

“I suppose.”

“Just because you’ve decided to take what you love to the next level doesn’t mean that you don’t love it. In fact, it means the opposite. It means that you’ll share your amazing talent to a much broader audience.”

“I think I get it. If I train my designers my way of doing interior design; I’ll be multiplying my signature way of designing.”

“You got it.”

“So, what will I need to do to complete this transition? Should I just start training my designers?”

“If only it were so easy. Training is a start. However, you need to go deeper than that. You work with creative people who value their artistic creativity. You need to collaborate with your team; and develop a collective culture. A way of doing things that you can repeat and extend beyond your current employees.”

Brooke worked with Coach Russ weekly for several months. She learned that it was much harder to offload her high-visibility clients to designers who she thought were rookies. Russ helped Brooke change the way she saw her staff. She started taking their input, and together, they created a genuine, repeatable design process that was called the ‘Brooke Designs’ Way.

Brooke had another hurdle to overcome. While she had offloaded much of her design work, she felt like she didn’t have much to do in her company. She felt as if she wasn’t needed at all. She met with Russ for one of their coaching sessions to share her new dilemma.

Russ asked, “What would you like to work on today, Brooke?”

Brooke responded, “While I feel like my design team is quite a bit more competent, we’ve still not grown beyond one-million-dollars in revenue. I had hoped that these changes you advised me to do would help our design practice grow into a larger business.”

“I see. Tell me what you think is causing your stagnation?”

“Russ, I thought that you could tell me.”

“I can. But, just like I’ve taught you how to allow your designers to think creatively, I want you to come up with some possibilities.”

“I don’t feel like I’m productive. If I were ‘doing something’ as a designer, we would be further along than we are now.”

“Let me ask you. What’s the job of a business owner?”

“I suppose I tell my designers and other employees what to do.”

Russ frowned, “You know better than that. What have we been talking about this past six months?”

“Ok. I don’t tell my employees what to do; I inspire them, and they figure out what they need to do on their own. But, if they’re on their own, what am I supposed to do?”

Russ could see that he may need to offer some help, “What is preventing you from hiring an additional designer or helper in your business?”

“I can’t afford to pay an additional designer?”

“Why not?”

“Because I don’t have enough interior design work for them to do?”

“Why don’t you have enough work for them to do?”

“Because I don’t have enough interior design customers.”

“How will you get more interior design customers?”

“I suppose I’ll have to market and sell… right?”

“Wrong. You need to hire a marketing and salesperson to do it for you. Haven’t you learned anything from our past six months?”

Brooke smiled, “I got it. I need to stop DOING and start LEADING.”

“You got it. So, what are you going to do?”

“I will hire a salesperson.”

“Good for you.”

Brooke was turning into a genuine business owner.

After she hired a salesperson, she realized that sales would increase, so she hired a manager to run her business. They created a system for hiring and growing as they increased their interior design backlog. Not only were Brooke’s designers on autopilot, but so were her manager, her saleswoman, and everyone else.

While her interior design business had reached two million dollars annually in revenue, Brooke decided to open another design studio in another city. She’d created a sure-fire business that didn’t require a second of her time. The only thing she had to do was duplicate her business model in a different location.

Two years after she started working with Coach Russ, Brooke was approached by a large national home builder. This builder wanted to offer interior design services with every home they built. It was a high-end custom home builder, and they were convinced that Brooke’s Designs was precisely what their firm needed to dominate the high-end customer home-building market.

Brooke now had an odd decision to make. Does she take this large builder’s $5M buy-out offer, or does she continue duplicating her successful business model in major cities? Either way, Brooke was convinced she had created a REAL BUSINESS instead of a design practice.

BUSINESS LESSONS LEARNED

In our story of Brooke, she learned a tough lesson for most professionals who start their businesses. Professionals have the true option of either growing their practice or growing a business. There’s no WRONG decision. Frankly, our story would have had a happy ending if Brooke had decided to continue her million-dollar practice as it was.

If you want to grow a business, business owners progress along a specific four-stage path: 1) Technician, 2) Manager, 3) Entrepreneur, and 4) Investor. Had Brooke remained a practitioner, her design practice wouldn’t have progressed past the ‘manager’ phase. When Coach Russ met Brooke, she was straddling the Technician and Manager growth phase.

As a business coach, I help business owners transition from one phase of business ownership to the other. At each phase of transition, there is resistance.

Employee to Technician

Most professionals are employees before they try to start a business. As a valued employee, you have job security. Chances are you don’t make as much money as you’d like, but you have health benefits and a 401k and feel secure. To start your own business, one of three things must happen:

Regardless of how you move from employee to technician, you will either fail to gain the customers you need or be super busy doing the work of your “technician-based” business.

Technician to Manager

To be clear, this transition often happens in three phases. In the first phase, you hire administrators, bookkeepers, and other support staff for your expertise. In the second phase, you may employ salespeople or other less-skilled professionals. The third phase requires you to stop doing the professional work of your business and rely solely on the expertise of your staff. In Brooke’s story, she was in the second phase of this Manager stage.

The resistance experienced by Technicians in moving through this stage of business growth is letting go of the thing they love to do… which is their trade. Let’s face it. If you’re an engineer, you spent years becoming a skilled engineer and LOVE engineering. Becoming a “business manager” and pushing papers for the rest of your life is not appealing. If you’re a chef, you love creating masterpieces in the kitchen.

Keeping your skills to yourself is the “limiting belief” that I coach my professional business owners on. The best way to grow and share your skills with the world is to transfer them to others… not to keep them to yourself. The truth is that as a manager or leader, you dramatically amplify the good that you can do for others with your profession.

Manager to Entrepreneur

The transition from Manager to Entrepreneur is subtle but necessary to grow your business. An entrepreneur has created a repeatable value-production machine. If you offer your customers a service, entrepreneurs develop systems that allow anyone to fit into their system to give their customers quality service. If you manufacture products, you create supply lines and distribution networks for your products to wholesalers and retailers.

This systemization of your business allows you to step out of the company at some point in the future when you want to become an investor.

The point of resistance to this transition is being unaware that you lack appropriate processes and systems. Ask yourself this question: If you took a six-month vacation from your business, would your business continue as it did with you actively managing it? If the answer is NO, then you have work to do at this transition point.

In Brooke’s situation, she duplicated the success of an interior design firm in another city, demonstrating that she had transitioned from Manager to Entrepreneur.

Entrepreneur to Investor

The final transition is to move from Entrepreneur to Investor. Just like moving from Technician to Manager, some business owners consider this transition as “ending” a part of their life that has brought them joy. Most business brokers deal with this resistance constantly. A business broker is in the profession of finding a buyer for a business. The selling business owner over-values their business and is resistant to selling for what the business broker values their business.

The best way to avoid this awful experience as you try to sell your business is to understand better how the value of your business is determined early in your business ownership experience. When you look at your business as a creation instead of some job that you hope to quit someday, you’ll start understanding what actions add value to your business and which ones set you up for the disappointing offer when you try to sell your business one day.

Becoming an investor doesn’t mean that you will retire. In my case, after I sold my business, I became a business coach. And… now I’m a Technician all over again 😊

This post is part of a Coach Russ story series by Jeff Schuster, 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.