Why Business Owners Should Work ON the Business, Not IN ItMay 22, 2023
"A man who stops advertising to save money is like a man who stops a clock to save time." – Henry Ford.
Now, although this quote directly refers to the importance of advertising, it subtly illustrates the essence of understanding the big picture in business, which is: in an attempt to save on some aspects, you could be losing out on much more. The same is true for business owners who focus solely on working IN the business rather than ON it.
I wrote this article after reading the answers to the questions I ask when someone schedules a strategy session with me. They obviously are struggling with marketing in some way to schedule the call. So I ask them "
I don't think that most business owners really read that question: "When it comes to GROWING your business... GROWING!
As a business owner, it's tempting to dive headlong into the day-to-day tasks of your enterprise. After all, it's your baby, and who else knows it better than you do? However, research suggests that this approach might be costing you more than you think.
According to a survey by The Alternative Board (TAB), 63% of business owners work more than 50 hours per week, with 33% working over 60 hours. The irony here is that the same survey shows that only 32% of a business owner's typical day is dedicated to strategic activities - the sort of work that drives a business forward. The majority of their time is instead spent on operational tasks or firefighting issues.
The Lost Opportunity Cost
Every hour you spend handling tasks that could be delegated is an hour you lose focusing on growth and strategy. This is where the concept of opportunity cost comes into play. Opportunity cost represents the potential benefits an individual, investor, or business misses out on when choosing one alternative over another.
According to the 80/20 rule, or the Pareto Principle, 80% of your results often come from 20% of your activities[^2^]. If the bulk of your time is spent working IN your business rather than ON it, then you're missing out on the potential 80% of results that strategic planning and decision-making could bring.
From a financial perspective, if you're performing tasks that you could hire someone else to do at a lower rate, you're not maximizing your earning potential. If you could be earning $100 an hour doing high-level strategy but are instead doing $20 an hour tasks, your opportunity cost is $80 for each of those hours.
The Importance of Delegation: Scaling Your Business
Delegation is a key part of working ON your business. It involves assigning tasks to your team members according to their skills and roles. This not only frees up your time to focus on strategic tasks but also empowers your team to take ownership of their work, boosting morale and productivity.
According to a Gallup poll, companies that encourage delegation grow faster, generate more revenue, and create more jobs compared to businesses that don't delegate. So, by holding onto tasks that can be delegated, you might be stifling your business' growth potential.
The Big Picture: Long-term Strategy and Innovation
When you free yourself from the daily grind, you have more time to see the bigger picture and focus on the long-term strategy. This could involve new market trends, potential partnerships, innovative product ideas, or opportunities for expansion.
Additionally, by focusing on strategy, you can help ensure your business's long-term survival. A study by Boston Consulting Group found that over a 10-year period, 32% of businesses failed due to neglecting long-term strategy.
In conclusion, working ON your business rather than IN it may initially feel counterintuitive, particularly for new or small business owners accustomed to controlling every aspect of their enterprise. However, by doing so, you give yourself the freedom to focus on long-term growth strategies, delegate tasks to foster a sense of ownership among your team and avoid the steep opportunity costs associated with being mired in day-to-day operations. As Michael Gerber, author of "The E-Myth Revisited", famously stated, "If your business depends on you, you don't own a business—you have a job. And it's the worst job in the world because you're working for a lunatic!" It's high time we step back, relinquish the reins of micro-management, and truly embrace the role of an entrepreneur - the strategist and visionary.
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