The most import piece of business advice I have received to date is:
“Work On Your Business, not in it” The E-Myth Revisited: Why Most Small Businesses Don’t Work and What to Do About It(aff)
In the past I have been guilty of building a job instead of a business, so in this post I want to give you some warning signs that you are building a job instead of a businesss, or to go with the quote, you are working in your business not on it.
What’s Wrong With Building A Job?
Nothing, but it is probably a better idea to build a job using corporate money so you get all the benefits associated with employment, but since you are here as a solopreneur building a digital persona I will not go down that route.
What do I mean by a job? I mean that you are tied to your business in the same way you are tied to a job, if you don’t work in your businesss, you are not earning income. I belive deeply that we, as solopreneurs, should be building true businesses that deliver to us with some slack so we can have a life outside our micro business to take a couple of weeks holiday/vacation or to spend time on other areas of our life.
The Job I Built
I write from personal experience, In the past I have built a job instead of a business. Here is my story:
I built a computer technical support services business. At first it was just me working away doing 100% of the business and delivering the services. No passive income when I was not working, just by the hour work. I quickly reached 100% capacity and the stress built up.
I decided to bring onboard some contractors, I though this was the way to build a business out of a job, but that was even worse, I had to prepare job specs for the contactors, manage their work., check the quality of their work and report back to the clients. I was stil l tied to the business, If I was not preparing quotes, and detailed task specs, no income was coming my way. What made it worse, I don’t like project management, I find it dull, feel ill at ease delegating. I had built a job I didn’t even like!
Warning Signs You’ve Got a Job
Here are the warning signs that you are building a job.
1) You cannot take time off and earn money
When you take time away from your business to take a well deserved break, or due to forced absence due to illness of you or your family you do not make any income?
I want to help you to build a business that still has cashflow when you are not actively working in your business. Your business is more job like if you cannot earn passive income.
2) You have to be present to deliver your product or service
Similar to the first point, if you have to show up somewhere to execute your business this should be a red warning light to you.
This may be client sites, a bricks and motar establishment such as a store. Having to be somewhere rather than be where you want to be is another job sign. Try to re-engineer your micro business so you can work from where ever (and whenever) you want. You are the only one in your business and you have competing priorities on your time. If you have to be in your office 9-5 to meet clients you are stuck to your business. It may be on the way to a job situation.
3) You sell your time on a one to one ratio
Alarm bells should be ringing if you sell your time on a one to one ratio to a single client or customer. Big legal firms and consulting firms do this very successfully by selling the time of their employees on a one ot one ratio and taking a cut of the fees as profit.
I used to work for a big 6 (as it was then) accountancy firm as a computer auditor, and the rule of thumb for your hourly billing rate was 1/3 for you salary, 1/3 for your costs; estate costs, pension, etc and one third for the partners. The partners take profit for every hour yoru work.
As a solopreneur, you don’t have the benefit of large teams working for you, making profit per hour, you only have your own profit per hour, and this does not scale. I recommend creating additional income steams which do not require one to one time selling, so you can get off the time as money treadmill job and build a business.
You Don’t Have A Product
If you business is a service only business with no products that can be repeatedly sold once you have made a one off time investment, you may have ajob on your hands.
The type of products I recommend for solopreners are
- Information products – package your expertise as an e-book, audio program or video download
- Books – write an old school book and publish (or self publish it)
- Physical items that can be easily sold and dispatched (I recommend outsourcing your fulfillment)
- Events you can sell multiple seats to – seminars, webinars, conferences, concerts.
A product is an excellent way to grow your business, they are fixed prices, build once items, that can be repeatedly sold. Your time has been invested and sold many times over.
The tools and techniques to deliver products will be covered in detail on this blog.
There Is No Way To Scale
You are currently at 100% capacity, you cannot take on more business, because there are simply not enough hours in the day. This is a sure sign you have a job not a scalable business.
You Have A Bespoke Services Only Business
You may think I have a bit of an issue with service business (and I do) but running a services only business such as consulting/coaching, copy writing or design work means you trade time for money. You are tied to your business for those hours, and it can become a chore to have to do the work, search for work rinse and repeat as necessary.
I will write in detail about hybrid product/service business in the coming weeks.
Have You Built A Job?
Are any of the warning above made you sit up and think? Your online service business should be a true business with assets that can generate incoem 24/7 if it cannot it’s time to review your portfolio and see where you can make some changes.
Image by 4yas