Understand your bussiness profile first
by Victoria Bowen
Have you ever said, “If I were better organized I could be so much more productive!” or “Managing people is my strong suit – getting into the technical details is best left for someone else.”
I certainly have.
When you are part of a mid to large business, the structure normally allows you to work at the skills and/or tasks you're good at. After all, you were hired to fulfill a particular role based on your experience and skill set, and as you progressed in the organization, you either got more proficient and/or expanded your abilities, which only added to your success.
But being an independent requires so much more
In an entrepreneurship or small business, you don't have the luxury of focusing on only the things you're good at or that you enjoy doing.
You're responsible for all aspects of your business (whether you want to be or not). Here's an example that illustrates my point:
A successful advisor at a large wirehouse has built a good book of business. She feels, however, that the marketplace has changed over the last few years and that transitioning her business to a fee-based model is something she needs to do. And since she is making the change, striking out on her own and forming her own RIA firm is the direction she wants to go in. Her entrepreneurial juices begin to flow and she becomes quite excited about having her own business.
However, a year later, she's unhappy with her decision. The primary reason her business thrived at the wirehouse was because she could focus all her energy on supporting her client base and prospecting for new ones. The firm took care of the office services, paid her assistant, did the accounting, paid the bills, took care of the compliance, etc. Now she has to do it all herself – and many of the tasks aren't things she likes to do.
For many people, even though the entrepreneurial spirit might be strong, most never have the opportunity to act on it due to a wide variety of reasons (e.g. timing, fear, support, and so forth).
Those who do take the leap usually lead with their strongest skills, which tend to focus on the technical aspects of their business. It's what they’re good at and what they know and like. The above case illustrates this. The Advisor’s “technical ability” is the advisory and prospecting work, not managing/running the business.
The importance of your business “profile”
Michael Gerber writes about this phenomenon in his book, The E Myth Revisited. I encourage you to read it while you go through the decision-making process of taking your practice independent, (http://www.amazon.com/E-Myth-Revisited-Small-Businesses-About/dp/0887307280).
For now, I'd like to share some of Gerber's ideas and add my own thoughts.
Gerber defines the three profiles within a person --Entrepreneur, Manager, and Technician -- from a business perspective.
Entrepreneurs: Their personality turns the trivial into opportunity. They are visionary, dreamers, and the energy behind activities as well as a catalyst for change. They are happiest when thinking about the “what ifs.”
Managers: They are the planners and the ones who bring order, organization, and structure to an enterprise. Without the Manager, the Entrepreneur’s ideas and visions would stall.
Technicians: They are the ones that get it done; they focus on the details and the methods to make things work and get things accomplished. It is very important to them that they control the work process because then they know it is getting done according to their specifications and process.
As Gerber points out, “The Entrepreneur lives for the future; the Manager lives for the past and the Technician lives for the present.”
The risks to being a technician
The good news is that most of us have all three profiles within us. The bad news? We don't have them in equal parts. In fact, Gerber says that the typical small business owner is made up of 10% Entrepreneur, 20% Manager, and 70% Technician.
Given their inherent struggle, the Entrepreneur and Manager can operate in a controlled environment (Gerber writes "the tension between the entrepreneur vision and the manager pragmatism creates a synthesis from which all great works are born"). In other words, you can create a productive business structure around them.
However, Technicians are the ones who typically pursue the entrepreneurial dream. Their personality lends itself to operating autonomously. But the problem is that he/she is the wrong one of the three profiles to be the business owner because, as we saw in the above case, there's more to running the business than its technical aspects.
Making your plan
The trick is to know the profile that is dominant in your personality and plan your business – and the way you will execute the tasks of the business – in a way that complements that dominant profile.
With the above case in mind, let’s go through some steps that will isolate the issues and provide solutions:
You must first “Know Who You Are.” Either analyze yourself using the profiles described above or get some help doing it. Better to know the realities up front than face them when you’re in your new setting (or in the case above – a year later).
Explore all the options that are available to you (complete independence or independence through a B/D firm, for example) and measure them against the “Know Who You Are” question.
Understand the scope of the transition
Completely understand the scope of what you are undertaking, such as the details of what the day-to-day operations will require. Don't guess or make assumptions. Get third party input from people who have done it themselves or professionals who helped others successfully make the transition.
In keeping with that scope, write all of the daily, weekly, and monthly tasks down. Determine what you want/can do and understand what you'll be "giving up" for every extra task you take on yourself.
If we consider the above case, had the advisor not gotten caught up in the idea of having her own business but concentrated on what had to be done to run it, the outcome a year later would have likely been different.
Making it work
There are alternative ways to carry out many of the tasks. Here are a few to think about:
Outsource legal, compliance, and technology tasks. There are many firms that cater to small businesses and offer turnkey solutions in these three areas.
Hire an assistant to help you and to run the office. Time is money and spending time in Staples or dealing with the copy machine vendor will cost you in the long run.
Have your accountant and/or small business banker design and implement a process that minimizes the financial and accounting tasks.
"Knowing Who You Are” is critical to leaving a corporate environment and starting your own business. Success will be lucrative, both economically and emotionally. Failure has extensive implications, again both emotionally and economically.
Give the decision the thought process it deserves and reach out to professionals to guide you. They can make the difference between the two outcomes.