Why did you go into business for yourself? Perhaps you had a great idea for a new product or service that you wanted to develop. Maybe you longed for the freedom to be your own boss. You may have been unfortunate enough to be made redundant. Or were you in a badly run business and knew that you could do much better? Whatever the reason for starting your own business, your journey on from that starting point will be the same as the thousands of other people who have also taken the brave decision to become business owners.
There are 4 distinct stages a business owner must go through before they complete the journey to the end game of having a “commercial profitable enterprise that works without them.” The challenge is that each of these stages demands a completely new level of knowledge and skills from the business owner. Each also has hidden pitfalls that will trip up the unwary, and prevent them from making it to the next level.
These stages, and the skills and attributes that you will need to master each of them, are set out below:
Stage 1: Self employed
The main challenge at this level is the fact that there are so many jobs to do, and so little time to do them all. Initially, it is all about learning effective sales and marketing techniques to bring in the business. One the work is in, then you have to actually do it, as well as dealing with the finances and managing the cash flow. The biggest issue soon becomes that the more successful you are, the more out of control your business becomes. You are constantly pulled from pillar to post by the demands of keeping everything going.
The first and most important skill to enable a business owner to navigate stage 1 successfully is self-motivation. Without bags of drive and energy, nothing is going to get done. The good thing is that in the early days, everything is new and exciting, because it is so much better to be in charge of your own destiny than working for somebody else! But after a while, this enthusiasm can dwindle, so the ability to understand what motivates YOU to keep going is paramount.
The next skill is self discipline. Now you’re a business owner, there is nobody else there to make sure you turn up on time, organise your tasks, or do all the mundane work for you. The ability to prioritise your many tasks and focus your time on dealing with the important things is key, if you are going to continue growing your business and move on to stage 2.
Stage 2: Owner manager
As your business grows, you will need to take on staff to help you run the business. This will free you up to focus on the things you are best at, and allow you to delegate the things that are not the best use of your time. However, employing staff brings a new set of challenges.
Firstly, you need to make sure that you recruit the right people with the right attitude, and ensure that they buy into your vision and values. Then you have to ensure your team do the right things by setting out the “rules of the game.” That includes defining their roles and responsibilities, and putting in systems and processes for them to follow. With these structures in place, you then need to become a trainer in order to pass on your skills to the team. Then you need to ensure that they are working to your standards.
As you take on more people, you will have to manage team relationships, ensure effective communication and start delegating responsibility. There will also come a time when you have to bring certain team members to account and discipline them. Get these things wrong, and you will have a dysfunctional team that hinder the growth of the company. Master them, and the team will help you to drive the business forward and free you up from the day to day activities. Once you have your team performing well, you are ready to move to stage 3.
Stage 3: Owner leader
At this stage you will need to learn to let go, step back from day-to-day operations altogether and focus most of your time working ON not IN the business. Failure to do this will result in micro-management, and a business with no direction.
The other skill that you will need to develop at this stage is talent spotting. The future growth and success of the business no longer rests with you, but with the people you employ. In order to grow a truly great business, you need to bring in people who are better than you. You then need to develop skills as a leader to keep the vision of the future alive, maintain the culture, ensure that the business stays true to its core purpose and keep the team focused and motivated.
As you improve these skills, the time you need to spend in the business will reduce, and eventually you will be ready to step out of the business completely, and move on to stage 4.
Stage 4: Entrepreneur/investor
Having successfully built your first business, you can now use the profits and skills you have gathered in other ways. You could diversify, buy or build more businesses or even consider franchising your business. You are now in the business of making money, and the vehicle to achieve that end does not matter. You may stay with at least one business, or you may be interested in learning how to invest in other assets, such as property and stocks/shares.
The ultimate aim at this level is to build up sufficient income generating assets so that you no longer have to work. If you chose to continue working, you do so because you love the challenge. Of course, if you are successful enough to make more money than you need for yourself, then you get the chance to give back to others. This could be by working with charities, being a non-executive director, trustee or business mentor.
The other option you have is to sell up what you have built and start the journey again, because the thing to remember is that business is a game, and if you play it right it will be fun! So why not take ACTION and start the game all over again?