The Five Stages of Business Ownership
The stages of business ownership can be broken down into five main stages as outlined ahead. As the business owner, you take on three main roles throughout this process; the technician, the manager, and eventually the role of owner. Each role has a different mindset and goal. Most business owners start their business because of their love for doing something. They are moving away from a job, and into self-employment; essentially doing what they love. As they progress through the stages of business, their role and their mindset must change.
1.) Technician Level (Technician)
At this stage in business, the owner wears all of the hats. They do the marketing and sales, do the deliverable work, and take care of all of the back office work that needs to be done to keep the business operational. Initially it is fun at this stage, the entrepreneur is doing what they love and are starting to go. The issue they run into at this stage is the business starts to eat them alive, taking every waking moment to operate. The demand for what they provide has exceeded what they can handle on their own. They then have two choices; stay small and raise prices significantly (becoming an artisan) or start hiring others to help fulfill the work.
2.) First Hire to Help Do Work (Technician/Manager)
Many owners are hesitant to make their first hire because they believe that only they can do the work right. They must realize that nobody else cares about their business as much as they do - it is THEIR business, not anyone else’s. Why would you expect them to care as much as you do? If you can find someone that is 80% of what you do, you are sitting great. As long as you have set forth the specific the specific processes for doing each task and the expectations for doing those tasks, everything will turn out fine.
The first hire is the hardest. Many business owners believe that it will help alleviate their workload, however it initially ads more to it. The owner now has to focus on everything they were doing before, plus payroll, hiring, training, and ensuring the quality of work produced by the new employee. Though this is a stressful time, it is necessary to move onto the next step.
3.) Employees Do Deliverable Work (Manager)
In this stage, the owner is able to take on the role of manager. They have removed themselves from the “field” so to speak. Allowing their employees to complete all of the deliverables, while they are able to focus on driving more sales and making sure everything is running smoothly. With building a team, there are more processes the owner must outline and systemize to ensure everything operates as it should.
The workload at this stage will lighten slightly for the business owner as they begin to shift their focus from getting work done to how they can grow the business and keep their employees busy.
4.) Sales Team & Office in Place (Manager/Owner)
Now that the deliverable work is completed by employees, the owner can shift focus to removing himself from sales and the back office. After writing out the processes and standards to systemize these roles, the owner can hire sales and office staff to replace him. At this point, the owner looks over all of the operations and puts out any fires that come up.
It is important that the owner focuses on employee development; “bossing” around employees will get them nowhere. The owner must become the leader to the staff and encourage them to do their best work. They are there to serve the staff, not the other way around.
5.) Managers in Place to Ensure Quality (Owner)
At this stage, the owner becomes a true owner of their business. They have put managers in place to help employees and ensure operations are running as they should. The managers now take care of issues that arise. The owner can now focus on driving expansion and growth. They should be able to leave for a week or two and the business operates as if nothing has changed; the power of building out business systems and removing yourself as the bottleneck in the business.
On a side note, prior to making a hire, make sure that the process has been simplified and non-essentials have been eliminated. There is no sense in hiring someone to do a task that could be automated or is not essential in the first place; it is just wasteful and inefficient.
The best way to take your business to the next level is to spend your time on tasks that drive expansion; such as systems and automation, growing sales, and starting initiatives. The phrase, “Work on your business, not in your business” comes into play here. Don’t be the bottleneck preventing your own growth.