Being a business owner is a balancing act, and not an easy one for that matter. While the rewards of being a business owner comes in many forms, salary, which is a short-term reward, bonuses which are the medium-term reward; and increased valuation of the business, which is the long-term goal. Your goal as an owner is to achieve a balance of all of these throughout the business building process.
Over the years, I have met many landscape company business owners who do not even take a paycheck. When I ask them why, they most often say that the business cannot afford to pay them. When I hear that, job number one is to figure out why not, and where the income shortfall is coming from which prevents that from occurring. The answer is usually pretty simple, it’s either the owner’s own mindset, not enough revenue, not enough profit on revenue, too much spending, not enough future planning, and the list goes on. I see the effort to build your stability, equal to that of providing for your TEAM members. You need to be transparent; make sure your family and employees understand what you are working to accomplish, again; not for you, the company at large. Ask yourself; what could be done now to improve the financial performance of the business to relieve the stresses of personal finances. The reality is everyone can help with this process.
Your job as a business owner is to set direction. Make sure goals are in place. Build budgets and forecasts to match goals. Hold people accountable for delivering to goal and staying within assigned budgets. When people are struggling, evaluate if they are in the right seat on the bus, or if they even belong on the bus at all, or if they simply need more training and time to develop. Do the same for vendors and customers.
You won’t have the perspective, time or energy needed to be an effective business owner if you’re running around making things happen with day-to-day activities. Build a team that can help the business move forward. Learn to delegate instead of doing. Follow up to ensure things went as expected. Learn to ask, “Who can get this done?” Step back. Make room for other people to contribute.
As the owner, you’re multitasking all the time: ensuring the company today has enough great customers willing to pay for today’s goods and services, as you invest to ensure that tomorrow’s customers, income, employees, products and service are as good as, or better than today’s. Build reports and set aside discussion and analysis time so that it is easier to see if things are on track.
You have to continually test your growth plan for the business. Does it generate enough profits to pay the owner fairly, pay taxes, pay off debts and add to cash reserves? Can you minimize the risk of having to put in funds in difficult times? Remember profits today tend to lead to profits tomorrow. Make sure you’re demanding enough of your business so that you can respond positively to your family’s challenge of ensuring you’re compensated fairly. In the end; you are an employee and need to be paid for the contributions you make.
Looking for a good book on the subject, suggested reading;
- The E-Myth Revisited: Why Most Small Businesses Don’t Work and What to Do About It Paperback – by Michael E. Gerber