In SCALE: Seven Proven Principles to Grow Your Business and Get Your Life Back (Portfolio, an imprint of Penguin Random House, 2014), the authors Jeff Hoffman and David Finkel discuss how to grow a business while allowing the owners to have control over their own time. 

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The "hit by the bus" test

We want to ask you an extremely important question, one that very few business owners ever allow themselves to consider because often the answer is too painful to contemplate:

If you were hit by a bus tomorrow (or otherwise incapacitated), what would happen to your business?

We surveyed more than 1,000 business owners over the past five years, and our findings revealed that if the average business owner became incapacitated and couldn't work, their business would fail in less than 30 days. Thirty days! Think about what this would mean for their families, employees, and customers. You put in all those years of blood, sweat, and tears to build something that could literally end in an instant.
Even if you are blessed with the health and good fortune never to be hurt or unable to work, that doesn't mean you're home free. The unfortunate reality is that most business owners build a job for themselves, not a business. The businesses they are creating are dependent on their showing up to run them, day in, day out. They have built what we call owner"reliant businesses, with long hours, no real freedom, and no defined exit strategy.

Even "successful" businesses have to deal with this challenge. In fact, many owners of successful companies are so busy doing the day"to"day job of their business that they don't have the time or energy left to grow and develop it as a business. Here you are, having done all the hard work of growing sales and production, yet you're likely still so consumed by managing the day"to"day operations that you don't get to truly enjoy all the fruits of your labors. If you're not present each day, your business suffers, in many cases grinding to a halt.

Are you really free if--even as the "business owner"--you don't control your time and what you do with it? Isn't that the entire reason you became a business owner, to control your own schedule and enjoy the time and freedom to do what you wanted, when you wanted? Of course it is.

Furthermore, you simply cannot safely scale your company if you are the critical lodestone for your business. In order to scale your company you will need to build a business, not a job.

Escaping the self-employment trap

All businesses start at Level One (start"ups), feeling their way forward to launch their new venture. Those that survive reach Level Two (owner reliant). It's here that most companies get stuck. A Level Two business is a business that works, but only because you, the business owner, are there every day to make it work. You make most of the decisions. You generate most of the business. You meet with all the key clients and perform most of the important work of the business. You stay in full control. Sure, you have people to help, but they're there to do just that--help--not to lead or take ownership of central parts of your business. The core knowledge of how to manage and direct the business is locked up in your head, and if something should hap" pen to you, your business would crumble. Even if you manage to somehow escape for a short vacation, you probably sneak your iPad or smart phone with you on the trip and check e"mail when your family isn't looking.

The painful reality is that most Level Two business owners get caught in the Self"Employment Trap. They're so busy doing the "job" of their business that they can't step back and focus on growing their business. What's more, because of the way they are building their business, the more success they have, the more trapped they become inside their company.

So what's the way out of the Self"Employment Trap? You've got to work less and get your business to produce more. Remember, the more you do, the more you have to keep doing. The more you get your business to do, the more time you have to grow and build your business. This means building your business with the end in mind, the end being the day when it is no longer reliant on you the owner. We call this type of business a Level Three business.

In the early years of your business, you're naturally the main engine driving your business forward. You'll wear all the hats at various times, and you'll have few formal structures and systems within your organization upon which you can truly rely. But as the business matures, you become more confident you'll generate consistent sales and ensure that your business stays profitable. At this point, you've got a Level Two business.

As you enter Level Two, you'll face a crucial decision point at which you can settle for owning a Level Two company or instead choose to raise your business to be a strong and independent entity that benefits from your involvement but is ultimately inde" pendent of it.

This isn't something that "hard work" alone is going to solve. Blindly working hard is part of the problem. The more your growth is based on your personal production, the more dependent your business becomes on you for that production. You've got to make sure that even in the midst of meeting the daily demands of your business, you take some of your energy and invest in the systems, team, and internal controls that will allow you to scale your business beyond just you.

Copyright (c) Jeffrey Hoffman and David Finkel, 2014.