I started, grew and sold a multi-million dollar business over a 16-year period; and I constantly heard consultants tell me, “You need to work on your business, and not in your business.” While I understood the general premise of what they were telling me, they really never told me HOW to work ON my business instead of IN my business. That’s what I want to talk about in today’s blog post.
As an over-achieving employee, you figure out early on how to work and earn money. You learn that the harder you work; and the smarter you work; the richer you become. At least, that’s the idea. One day, your extra work effort is not being rewarded by your employer; and so you decide to start your own company. It doesn’t really matter what you do; you know that you can sell your skill and trade for more than what your employer is paying you.
Chances are that you’re right. As you start your new business several challenges pop up; and like a good worker, you deal with all of them. What a star you are!
Then one day after you feel like you’ve created some level of business success, a consultant or coach tells you that you need to WORK ON your business instead of WORK IN your business. This idea is foreign to you. You believe in working hard and earning a lot of money. Now somehow you’ve run into a wall in your business.
The Business Wheel
I have created a simple tool that helps business leaders work ON their business. I call it a business wheel. This wheel has eight spokes that help you focus on directing, and creating your business; and pull you out of your day-to-day business trouble shooting.
The first spoke of the Business Wheel is Operations. Operations is the core of what you do as a business. How you do what you do will determine if you have happy customers who will want to refer you to others.
Please consider these seven common elements to strong operations:
- Definition: You need to define exactly what it is you do; and how you do it.
- Delegation: Give responsibility to others and then hold them accountable.
- Systems: Document all processes of your business so that employees can read a book instead of asking you.
- Resources: The tools your people use to do their job need to be the best quality in your industry.
- Customer Feedback: Objectively find out what your customers think of your work.
- Gross Margin: Constantly maintain and improve cost efficiency.
- Convenience: Make it super easy for your customers to buy your stuff.
Rank yourself on a scale of 1 to 10 by putting a dot on the appropriate line in your OPERATION’s spoke of the Business Wheel. 1 means your customers hate you and would never recommend you; and 10 is that your customers tend to stick around, give you repeat business and refer you to anyone they know. Now you can work on improving operations or delegate this improvement to the appropriate manager in your company. Wallah, you’re working ON your business.
The second spoke on our Business Wheel is Marketing. Marketing is the act of getting qualified prospects to take notice of your product or service and come to you to learn more.
Please consider the following critical elements to a strong marketing spoke:
- Niche: Who are you targeting to be your customers?
- Message: Why are you any more beneficial than others who do what you do?
- Tactics: How do you plan to gain leads?
- Advertising: How strong is your advertising?
- Leads: How many qualified leads are gaining monthly?
- Budget: What does it cost you to generate a lead?
Now, rank yourself on a scale of 1 to 10 by putting a dot on the appropriate line in your MARKETING black spoke of the Business Wheel. A 1 means that you are attracting no leads at all; and a 10 means that you can attract as many leads as you want at will.
The third spoke of the Business Wheel is Sales. Sales is the act of converting an interested lead into a paying customer.
Please consider the following critical elements to a strong sales spoke:
- Sales Process: What is your step-by-step process to convert a lead into a customer?
- Sales Personality: How well are the people you have selling suited to sell?
- Sales Management: How do you track sales activity and coach sales people?
- Sales Compensation: How well is payment connected to sales performance?
Rank yourself on a scale of 1 to 10 by putting a dot on the appropriate line in your SALES black spoke of the Business Wheel. 1 means your converting no leads to paying customers; and 10 means that you have a 100% conversion rate.
The fourth spoke of the Business Wheel is Employees. As a growing business owner, this is one of the most important aspects of your company.
Please consider these eight key areas of focus on your employment environment:
- Organization Structure –How easily can your organization structure scale up?
- Hiring – How well do you find qualified people for open positions?
- Orienting and training – What processes do you use to orient and train new hires?
- Energetic workplace – Do you and your employees look forward to coming to work?
- Leadership – Do managers know how to motivate and coach your staff?
- Team building – How well are you leveraging strengths of team members?
- Evaluation – How well are you rewarding good; and eliminating bad behavior?
- Retention – What is your plan to retain some of your most valuable employees?
Rank yourself on a scale of 1 to 10 by putting a dot on the appropriate line in your EMPLOYEES black spoke of the Business Wheel. 1 means that employees want to leave your organization as soon as possible; and 10 means that you have a waiting line of eager, high-talented people wanting to work for your company.
The fifth spoke of the Business Wheel is Finance. Finance is all about managing cash, borrowing, pricing, budgeting, forecasting and investing.
Please consider these seven areas of finance:
- Accounting & Book Keeping: How do you ensure financial transactions are tracked accurately and you have a handle on direct costs, overhead and profitability?
- Cash: How many months can you last, if your customers stopped paying?
- Pricing: What have you done to ensure your prices are not too low or too high?
- Budgeting and Forecasting: What’s your process for budgeting and forecasting monthly expenses and revenues?
- Controls: What specific controls have you put in place to prevent fraud or embezzlement?
- Investing: How do you gain funding for ideas that stretch your personal finances?
- Debt: How well are you leveraging debt to grow your business?
Rank yourself on a scale of 1 to 10 by putting a dot on the appropriate line in your FINANCE black spoke of the Business Wheel. 1 means you have no clue about financial matters; and 10 means that you are a financial guru.
The sixth spoke of the Business Wheel is Growth. A natural progression for all businesses is you struggle, then you make money and then you grow.
Please consider the following four items that contribute to healthy growth:
- Growth strategy: What is your strategy to grow as customer demand increases?
- Scalability: How will you grow and improve the customer experience at the same time?
- Facility: How will you house additional employees as your company grows?
- Mindset: Define your personal thoughts on growth. What will it mean to you?
Rank yourself on a scale of 1 to 10 by putting a dot on the appropriate line in your GROWTH black spoke of the Business Wheel. 1 means that you are planning on shrinking; and 10 means that you have solid growth plans.
The seventh spoke of the Business Wheel is Legacy. Legacy is what will happen with your company once you either become disabled, exit your company or die.
Please consider the following items for your Legacy:
- Plan: What’s your plan to exit your company?
- Death or Disability: What will happen to your family & business if you become disabled or die?
- Selling: What have you done to prepare your company for sale?
- Personal Involvement: How well will your company operate with you gone?
- Mindset: Who are you when you no longer own a business?
Now, rank yourself on a scale of 1 to 10 by putting a dot on the appropriate line in your LEGACY black spoke of the Business Wheel. 1 means your company would crash if you were to leave; and 10 means you have your Legacy formally planned out.
The eighth spoke of the Business Wheel is your personal life.
Please consider these seven areas of your personal life:
- Personal Growth: What are you doing to grow yourself?
- Spiritual Awareness: How consistent are you living within your spiritual beliefs?
- Fun & Enjoyment: What have you done to prioritize fun in your life?
- Relationships: What are you doing to be intentional on relationships with friends & spouse?
- Family: What percentage of time are you investing in your family?
- Finance: How well are you doing with financial resources?
- What actions are you taking to ensure you are healthy?
Based on this discussion, rank yourself on a scale of 1 to 10 by putting a dot on the appropriate line in your PERSONAL black spoke of the Business Wheel. 1 means you feel your personal life is non-existent and completely neglected; and 10 means that you’re solid in all areas of personal fulfillment.
Every spoke of this wheel pulled you out of your business and changed your focus on the mechanics of running your business. Once you have reached 6 employees, if you have not changed your focus to working ON your business, you will suffer long working hours, unhappy employees, and poor customer service. Most rookie business owners will not make this transition for a variety of reasons. It really doesn’t matter what the excuse is, if you don’t make the transition, your company will cease to grow; and you will work yourself to death trying to continue to make things work.
As a business coach, I help my business owner clients change their mindset in a way that allows them the freedom and profitability they have always hoped for, but never thought possible. If you’d like to develop a Successful Business Mindset, I urge you to complete the free Business Wheel exercise below to see how you can grow yourself as a successful business owner.
As a long-time small business owner, I know how hard it is to create the business of your dreams while struggling with the financial realities of attracting prospects, converting those prospects into high-paying customers, and making money for you and your family. The biggest mistake in my past was not seeking the advice of wise counsel sooner than I did. I don’t want you to make the same mistake. I help my clients see exactly what they need to work on in their business by doing the Business Wheel exercise. If you’d like to try it out, sign up to the right. It’s completely FREE.