small business
Running to stand still
S TEVEN LAIT
How to grow your business by working smarter, not harder
By Rosalind Gray
BEING A NEW business owner is like being
a new parent. Enamored with each milestone,
you almost forget you haven’t slept for months
or brushed your hair for weeks. Rather than
first words and first steps, the heady days of
early “businesshood” bring other firsts: websites, contracts and customers. It’s almost
enough to make you forget the 90-hour workweeks.
But a few years down the line, are you still
running ragged round your business in
exactly the same way you were in the start-up
days? The Connection asked two business
experts for their thoughts about when it’s time
to step back, do less and manage more.
22 ;e Costco Connection SEPTEMBER 2012
Find the ceiling
There are only so many hours in a day,
there’s only so much you can charge, and there’s
a limit to the territory you can cover and to the
number of customers you can serve on your
own. Once you’ve reached these inherent caps,
you’re at capacity in terms of financial return.
According to Jeremy Bassett, small-business expert and owner of Corve Consultancy
( www.corveconsultancy.com), the only way to
grow a business beyond this point is to step
back from daily hands-on involvement and
step into the role of manager. It means
expanding, recruiting and delegating, and for
owners who still see their business as their
baby, this is not always easy. Some don’t want
to let go, some don’t know when and some
just don’t know how.
“Not everyone is keen to get away,” says
Bassett. “Many of my clients started for rea-
sons other than financial growth; they wanted
to achieve a better work-life balance, avoid
corporate politics or just for the absolute love
of baking cakes, landscape gardening or
restoring vintage cars. Their business objective
is to maintain a certain level of income for a
certain level of effort and no more. I wouldn’t
dream of telling them to step away as long as
they’re satisfied. But they have to accept that
they’ve reached a ceiling in monetary terms.”
Stop pedaling and start navigating
Paul Meades, managing director of business advisory and accountancy firm Meades
& Company ( www.meadesandco.co.uk), says
that once your business is established, it’s time
for you to stop pedaling and start navigating.
“Even if you’re not thinking of selling in
the next 10 years and aren’t yet interested in
the salable value of your enterprise, stepping
into the management room will give you a
powerful multiplier effect on any hours you
put in,” Meades says. “Owners who work at
the strategic level create more value.”
According to Meades, many hardworking
owners/managers just don’t realize they’re
running to stand still. “They [believe] they’re
building a profit-making business, but what
they actually have is a job,” he says. “A stressful
one. One that pays the worst hourly rate.”
Meades uses this illustration to show how
stepping away equates to company value:
Imagine you are an investor choosing between
two small businesses operating in the same
industry, in the same area. They are also mak-
ing roughly the same level of profit. On paper
they are virtually identical. However, when it
comes to management status, they represent
very different propositions.
The owner of Business A spends 60 hours
a week directly involved in all his business’s
functions and processes. He spends minimal
time with his family, takes two weeks’ vacation a year and spends the whole time stressing about what’s going on at work. His
employees need to run decisions by him daily,
and he checks his email every couple of hours
while away.
The owner of Business B spends 30 hours
a week on his business, mainly on strategic
planning and employee management. He plays
two rounds of golf a week. He takes a vacation
every three months, where he completely
relaxes with his family. He has no need to be in
contact with the office while away; he has com-
plete faith in his team and systems and knows
that everything will be fine.
Plotting a longer-term course
If most of your work involves decisions
and activities that will only affect your business in the next 30 days, you’re still working in
your business. This includes admin, operations, support, troubleshooting, fixing, production, delivery and responding to queries.
Working on your business means plotting
a longer-term course. The following activities
all count: business planning, competitor analysis, forecasting, managing, market research
and ideas, networking, process improvement,
relationship-building, team meetings, time
management and training (not helping).
If you’re hitting your limits in terms of
time and energy, you can keep working flat out
in your business and watch your revenues flatten out too. Or, get some distance and a more
strategic perspective for a far better return on
your input. You might find that, for the first
time, you are running your business rather
than letting your business run you. C
Rosalind Gray is a London-based writer and
frequent contributor to The Connection.
