You’ve probably heard the old clich, that to grow, a company owner must work “on” his or her business, not “in” it. This is very true at so many levels. Not only is it nearly imposible to grow your company as long as you’re working “in” it, but because you’re the one controlling everything, you’re often the biggest bottleneck.
It’s tough to let go after you built the business from the ground up. You were there, watching every penny and double-checking every detail to keep from making costly mistakes that could have easily killed your fledgling firm.
But as a business takes root and begins to grow (often that’s just under $1 million in sales or so), you must learn to delegate and make sure you develop a competent staff that will help the organization grow to the next level.
Many have been through this difficult transition. It’s important to note there’s a distinctive repeating pattern as you grow past that first jump. A number of contractors tell me they’re back in the same place, trying to break the $3 million dollar barrier, then again at the $5 million barrier, and so forth.
As owners, we need to step back on a regular basis and get a clear view of how we’re affecting our businesses, whether we’re doing $800,000 or $8 million in sales. Are we helping or hurting it? Do we have trouble getting out of our own way?
Let’s look at some signs of spending too much time working IN your business:
- You’re working in a “functional” capacity of your business, as a service technician, installer, salesman, customer service representative, etc. In a large company you may be working in a department like accounting or service management, rather than managing the department managers.
- You spend a lot of time micromanaging and second guessing your employees. In a small company you spend too much time in the field “finishing up” jobs, or doing callbacks yourself. In a larger company you’ve made the leap to hiring or promoting people to department heads, but you just won’t let them do their jobs.
- You’re the one everyone goes to when there’s a decision to be made. Unfortunately this behavior enables and encourages them to not take responsibility for important decisions — so when the you-know-what hits the fan they can simply say it wasn’t their fault, you made the call.
- You’re the first one in every morning and the last to leave. You feel like if you’re not there, working harder than everyone else, somehow the place will eventually fall apart. Many of us have been there. The key is to figure out how to reduce that dependency on you to keep everything going.
- You spend more time “just doing it yourself,” rather than taking extra time to teach someone else to do it. This one is a real Catch-22. After all, if you’re the best qualified to do something, it’s expedient, right?
The problem is there’s no growth in that. There’s no transfer of knowledge. And there lies the rub. Sure you can get it done faster, but if knowledge is not transferred, growth is stunted. Here are some things you can do to work on your business rather than in it:
- Take time to analyze and learn from your company’s successes and failures
- Regularly review P&Ls and other financials so you can make good business decisions — several times a month
- Take time to evaluate new opportunities that can strengthen the business
- Invest time in hiring, managing and developing career paths for employees
- Hire people capable of replacing you when the time comes, so that someday you’re not needed in day-to-day operations.
So where do you go from here? Can you wave a magic wand and suddenly years of old habits are wiped out? Of course not. If you’ve decided to make some of these changes, keep this knowledge to yourself. Do small things, one at a time. Always keep your goals in front of you. If you agree with what’s written here, tear out this article and keep it where you can glance at it every now and then. If you have your own list, write it down, and keep that handy.
Remember, this isn’t about big announcements or grand gestures. This kind of change is fundamental and takes a lot of work on your part — probably as much work as it took to build your company in the first place.
Dominick Guarino is Chairman & CEO of National Comfort Institute (NCI), (www.nationalcomfortinstitute.com) a national training and membership organization focused on helping contractors grow and become more profitable. Email him at [email protected] or call NCI at 800/633-7058.