Many people know it, few do much about it: sometimes we are our own worst enemies when it comes to being productive, particularly when we're a small business owner. All too commonly, we can see our friends, spouses, or associates running a small business and having it really take off but also see them working 18 hour days and beyond burned out. There are always challenges and opportunities for businesses but there is a particularly fragile point in a businesses life and that is scaling up your operation to meet growing demand. Most importantly this is a point when imbalances in production rates, accounts receivables, and inventory investments, among other variables, results in frantic cash flow scenarios that can doom a business to closure at worse and a lot of headache/heartache at best. It's quite the paradox to have lots of orders and product shipping but not having the cashflows at the right times to keep things smooth. This post is about this scenario and I think it can benefit everyone from reading it, not only business owners but employees and even in some ways, when you're running a home or making major life transitions. It's more on the "why" and if you'd like to know more of the "how" sign up for a free consultation or send me an email for more conversation.
Small business owners can suffer from a seeming paradox at this scaling stage: I built this business with my blood, sweat, and tears and am continuing to put everything I have into it. This is what's made it successful to this point, is what's making it successful now, and will do so in the future. What this really means is I'm the best person to make critical decisions, to make monetary investments or take expenses of really any size, or perhaps be the jack-of-all processes/operations in my business. This is only a fraction of what it's taken but it's working. However, because I'm so busy working in the business, keeping things running smoothly, I have little-to-no time, money, or energy to put into long term focuses for business (typically non-urgent yet important tasks/projects). This may be things like standardizing hiring processes, documenting critical processes, capturing undocumented learning into standard training, doing market analysis for new entry opportunities, or putting in time/money on improving my existing processes (read: unnecessary wastes in time, effort, money, etc.). When a business owner or manager, or frankly people in their daily lives, engage in these tradeoffs, they are taking on management or life debt, as Ben Horowitz describes in The Hard Thing About Hard Things. You're making decisions and taking actions that provide payoffs in the short term but this is ultimately at the expense of the long term. Some debt is fine but when it exceeds your value creation for the long term, this can buckle a business and wreak unnecessary havoc.
In my experience at Next Callings, I've observed some version of this scenario in almost every encounter I've had with other business owners. I'll be frank as well, it's tough as a small business owner myself to know when the perfect time is to cut over from "me doing the work" in some area of the business to "me paying someone else" to do the work, or even spending time automating or analyzing if it's 100% useful in the first place! We can get on autopilot and keep the wheels turning but not take time to figure out how things could be different.
5 Reasons Why Getting Out of Your Own Way Can Make a HUGE Difference
There are some assumptions here, before I get started. I think its right and critical given the emotional, mental, monetary, and time investment of a small business owner to stay deeply in tune with their business and also that they sometimes really are the best person for a particular role, for at least a while. Their passion and drive may be the critical ingredients to really make the task or project come through. However, here are some assumptions/suggestions for starting to get out of your own way and also the critical reasons why it can take your business to the next level.
Assumptions or Things to Get Done
- You've set up clear guidelines and specifications of quality for your product or service, from the customers perspective, and your employees clearly understand them and can train new employees when they arrive.
- You've crossed trained several key employees so they can take on roles and fill gaps as necessary.
- You've identified and empowered critical employees to make key decisions, even of making decisions that may cost up to $XXX dollars when you know your time and the payoff will cover the expense (in time or money) and perhaps the risks are low enough or capped.
- Your business partners and key customers know they can trust a second or third in command as much as they can trust you.
- You've identified critical choke points in your processes or places where your expertise isn't high enough to get the most out of your time or efforts, such as back office processes like accounting, social media, search engine optimization, or even office cleaning! The future is to prioritize these and offloading them in a systematic and high return on investment way. Every dollar of outsourcing/offloading should bring 3x at a minimum return for you in revenue but also in emotional returns and other intangibles.
Why This Can Make a Positive Difference In Your Business
- You free up the value to stream more smoothly through the business meaning you match demand for your product or service to your process and service flow. You're not in the way, making minute decisions, critiquing performance, or trying to be quality assurance so much and by doing so, the heartbeat of the business can run a little more smoothly and not entirely through you.
- You can decrease costs if the resource use (people, machines, etc.) is maximally utilized (without your direction, decision, planning, etc. all the time) and you don't have cash tied up in idle resources (must have balanced flow through the process though!).
- Your expertise is freed up to work more ON the business rather than in it
- You can focus on the important (urgent AND non-urgent) things to keep value streaming, growth happening, employees fulfilled and satisfied (so they stay and don't add costs!) and customers happy about working with you.
- Your time is focused on highest value activities for your business rather than activities you could otherwise eliminate, delegate, train, or automate, if you had the time and money to do so!
- You'll improve employee satisfaction by increasing their autonomy, competence, and relatedness to one another. Ever improving employees contribute to ever improving businesses. This is a virtuous cycle! See Self-Determination Theory.
- With increasing your time spent on long term opportunities, you will begin cultivating a variety of virtuous cycles to help keep the company moving and stable while allowing you ever increasing time and mental/emotional energy to devote to the right things in your business as well as life. The more the internal gears of your business run independent of you the more you can focus on being effective with high value efforts.
I hope these reasons seem relevant to you and perhaps clue you into ways you can get out of your own way. As a small business owner (or heck, an executive, mom, or otherwise!) you can sometimes feel like Atlas, with the world on your shoulders. It needn't be so but takes effort, attention, and habit. Below are a few resources to help expose you to some of the "how" methods for getting your business flowing smoothly and allowing you space to maximize their time/effort/money on the highest payoff activities. While there are plenty of suggested ways to improve your business, these resources come from my world in manufacturing and industrial and systems engineering and elsewhere. Many of them are informative as life enhancing methods as well! Again, contact me directly if you wish to discuss more. Best of luck to you!