By Jay Thompson
Do you have a business or a practice?
Business Bitz
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Does your business continue to operate on its own without you being present? A “real business” is one that functions even when you are not there. Many people who claim to be business owners really have a practice. Professionals, such as, attorneys or physicians, are good examples of this. They may even have several people on staff to assist them but if they don’t work everything stops. The whole operation is dependent upon the principal’s activity. Now there is nothing wrong with having a practice, and it certainly beats the alternative of having a job, but for one to realize the true benefits of entrepreneurship, and the freedom and opportunity it may provide, they must create something bigger than themselves. The true entrepreneur will develop something that will continue to function, and function well, with or without them being present.
So, if you find you have created yourself a job how do you fix it? Michael Gerber discusses this in detail in his books “The E-Myth and The E-Myth Revisited”, but I would like to discuss a couple of strategies that may help you to transform your existing practice into a real business that will continue to operate even when you are not there.
If you are one of the few that does have a real business, maybe you will get a few new ideas to help increase profitability.
#1 – Offer Products or Services You Personally Do Not Have To Deliver
The key to having a real business is to have one that operates even while you are not present. The best way to accomplish this is by selling products or services that you do not personally have to deliver.
If you work by yourself, and you take a vacation, no revenue is generated; you basically just have a “job” where you are your own boss; but if you work for yourself, and you have other people working for you, and the business generates revenue whether you are present or not, then you have a real business.
In other words, as Michael Gerber is known to say, “it is important to work on your business,” rather than, “in your business.” A great way to think of this is through the eyes of a franchise owner. Imagine a system of duplication where everyone knows his or her part. That is the ideal way to structure your business – where you can oversee the operations, but others do the actual work that is delivered to customers.
But the reality is most people operate where the business owner is the center of the operation that others have to go through before anything happens.
This design is very inefficient, tiring, and won’t provide the lifestyle that most business owners are truly looking for.
So look for ways to offer products and services that you do not have to personally deliver.
#2 – Delegate To Others
Do you resist delegation because you think that no one else can do the task better? In order to work on your business versus in it, you will have to focus on delegating a lot of tasks to other people. This may sound difficult but it is imperative and the reality is that nearly everything you do can be delegated more efficiently than doing it yourself. You should save the tasks for you that are truly within your unique skill set that no one else has.
#3 – Find Ways To Scale Your Business
Scalability means the ability to increase your revenue by simply adding more to it, equipment, people, etc., to carry out the processes you have put into place.
Once you have properly implemented strategies #1 and #2, there should be no limit to how big your business can grow. You may decide that you don’t want to grow beyond a certain size, but if you design your business properly, scalability should at least be an option for you.
#4 – Offer A Recurring Incentive Program
You should always look for ways to keep the same customers coming back over and over again. So much time, money and effort is spent on attracting new customers while, at the same time, the existing customers are neglected. Make sure that you meet your customer’s every need, as much as possible, with the product line or services you have available. And if you can offer a recurring program where the customer gets charged for the service automatically, that is even better.
#5 – Operate Your Business Like You Want to Sell It
Even if you never plan to sell your business, it is a smart business practice to always keep that as an option. Make sure you have everything set up so someone would want to purchase it. The fact is that if you are using these strategies that have been discussed, you should be in a good position for an acquisition.
If a prospective purchaser wanted to buy you out, they would look for the ability to operate the business without you in it. They would see you have systems in place that other people can implement even though you are not there. This makes your business very attractive. If you’re still working on building your dream business, or you haven’t started yet and are getting ready to launch, look for ways to put these strategies to work. I’m sure you will find them to be worth the effort.
Jay Thompson is a Business Consultant with the CSU Bakersfield Small Business Development Center. The CSUB SBDC provides premium, one on one, no cost consulting to small business owners in Kern, Inyo and Mono Counties. For more information visit their website at http://www.csub.edu/sbdc.
