Ambition Mission

In talking with numerous Partners (IT providers) about their goals for business growth and how to achieve them, the details of how the business owner spends his/her time frequently comes up.  The result of THAT conversation typically either shocks the business owner, takes our plan of action and goals in a new direction, or both.

On average, it seems that most business owners work a lot in their business.  There is nothing wrong with that!  The only problem that comes is when the amount of hours spent directly affects (or prevents) other areas that the business owner claims to be more important to him/her.

Different scenarios:

One scenario is the business owner is working two jobs.  They will be spending 35+ hours each week on technical work in addition to 30-40 hours each week on operations, financial management, staff management, customer management, working “on” the business and the all too common “putting out fires.”

A second scenario is the business owner who is working a lot just “running” the business.  This person will be working 65+ hours each week on managing staff, customers, finances, operations and “fires.”  This person usually finds little or no time to work “on” their business.

While there are numerous other permutations, these two seem to be the most prevalent.  Both have good points and not so good points.

The good news:

Business owners in scenario one are actually spending time to work “on” their business.  Whether this comes in the form of reading books, attending conferences, seminars, or webinars, business coaching, etc… is not as important as that there IS time being spent in this area.

Business owners in scenario two have gotten to the point where they recognize that they should NOT be performing technical work.  They realize that business management and sales are the “higher order skills” in a business.

The “not so good” news:

Scenario one owners are literally doing every job in the business at one point in the week or another.  Staff members exist as merely an extension of what the owner cannot get to.  “I can’t get to the problem at XYZ customer, so I need you to…”  The business is usually in chaos or hanging by a thread.  A business in this mode of operation cannot typically sustain a major problem – other than by pouring more hours into the week!  Left unaddressed, these business owners either get burnt out, or convince themselves that life would be simpler if they return to being a “one man show.”

Scenario two owners are similarly stressed.  They cannot figure out how to juggle all the balls effectively without dropping some.  This owner is somewhat different as he/she has a clearer understanding of WHAT he/she SHOULD be doing with the time, but not a solid idea of HOW to execute.

Recommendations:

First breath.  Second, step back.

We cannot improve what we don’t (or cannot) measure.  So begin by documenting the activities each week.  This will likely cause surprise in both the amount of hours being worked in or on the business as well as the breakdown of what those hours were spent doing.  Do this for at least two weeks, but preferably one month to get a good “baseline.” 

Next, write down “YOUR IDEAL WEEK.”  This week should add up to 168 hours and encompass every area of one’s life.  Start by putting activities on the list that are “non-negotiable” in your personal life such as a certain number of hours of sleep each night, church, or coaching a child’s soccer team on Saturdays.  Then add “non-negotiable” activities in your business such as sales, financial management/review, and staff meetings.

Separately, create a list of all other business and personal activities that you either have been doing or would like to be doing along with the number of hours each week that activity is expected to take.  This list should be broken into two – a business list, and a personal list.  The personal list may be a weekly dinner with your spouse, volunteering at the charity of your choice, or practicing that musical instrument.  The business list may contain items such as attending educational webinars, visiting customers, working on identifying (or implementing) a PSA tool for the business, etc… 

Prioritize each of these lists.

Finally, fill into YOUR IDEAL WEEK, each of these activities for business and personal.  Find a way to delegate what was on your lists but didn’t fit into the ideal week.  It will be amazing that the activity of “watching TV” is rarely on the list in anywhere near the amount it may have been previously! 

The fantastic news:

Now that you have YOUR IDEAL WEEK, make copies.  Give a copy to your spouse.  Hang it on your wall in your office and on your vanity mirror at home.  You are now among the few, the minute few business owners who actually know in which direction you are heading!

Happy Hunting!

Let Ambition Be Your Mission!

~ Matt Makowicz

(P.S. Any blog readers care to share a copy of YOUR IDEAL WEEK with me for comment or accountability, email it to me)

Today’s coverage of the election is commonly called “Decision ‘08.”  For some, an easy decision, for others a tough decision.  I am certain there are enough blogs out there dedicating something political to the fray today, so I will not add.

 I will however draw a parallel to business.  There is a reason we have term limits and elections.  First, nothing lasts forever.  Second, It is necessary to continue to challenge (and sometimes revisit) previous decisions.  Elections force us to do that with our government’s leadership.  Unfortunately, nothing forces it in quite the same way in a small business.

I speak with hundreds of small business owners each month and some, I am afraid to say are simply on “auto-pilot.”  VERY FEW change the way in which they market, sell, hire, operate, do their books, compensate staff, compensate themselves, or even answer the phone.  I am not advocating change for the sake of change,  (please don’t read into that too much) but it IS necessary to take a look at all areas of one’s business regularly - sometimes a hard look.

Here is an example that is common and based on the conversations I’ve been having with Partners out there seems to be all too familiar in this market/economy, etc…  The scenario is when to cut back on expenses.  In particular, when is it the right time to let an employee go?  This is such an emotionally charged topic, that concepts of fairness, guilt, regret, responsibility and fear all get in the way of making a business decision. 

I was talking with a business owner that had hired staff too quickly.  (hired staff and then began selling)  When business didn’t grow as quickly as anticipated to support the new expense of the additional staff, a decision had to be made.  The options, as the business owner saw them were

1) just sell more, it will take care of itself

2) fire the last person hired (that’s fair right?) [note: this was owner’s least desirable option]

3) cut back on other expenses, such as benefits for all staff

4) dramatically reduce the owner’s compensation (for the time being)

The owner was looking at emotional reasons and NOT looking at his business.  He was not analyzing the P&L, sales pipeline, balance sheet, and cash flow analysis - but he should have been.  In this case, he was considering lowering his pay by 50% to $4,000/mo and cut benefits such as mileage reimbursement and some other healthcare and fringe benefits to all employees.  His total savings would equate to approximately $6,500/mo.  Alternatively, as I saw it his other option was to let go one of his high paid (slightly overpaid) techs.  This single change would save approximately $8,000/mo when everything from payroll, taxes, benefits, mileage, etc was factored in.

Which is more emotionally taxing for the business owner?

Which is more emotionally taxing for the remainder of the staff?

And finally, the most important question (and really the only one that matters) is:

Which course of action is best for the health of the business both long and short term? 

Here is my point. 

When making dramatic decisions in your business, always do two things:  First, Pretend you are not the owner/operator but rather an investor looking out for the long term value of the business.  Second, be certain to look at major decisions from multiple angles and not be clouded by emotion.

Good luck and happy hunting!

P.S.  If you find yourself at this decision point and want an objective opinion from one’s who’s been there, reach out to me, I will be glad to listen and offer my opinion and help however I can.

Let Ambition Be Your Mission!

~ Matt Makowicz