One of the most common questions you might ask when you meet someone new is what they do for a living. The response is always correct – I’m an electrician, or a web designer, or a hairdresser etc.. However, a large portion of these people would also say that they are small business owners, which makes me wonder why thy tell people about the job and not the business.
So, what is a business? To me a business is a living, evolving entity which I contribute my expertise to meet the customer/client’s needs. I am creating something sustainable that can exist and operate without me – if that is sitting on a beach in Bali, or departed this earth. I have some freedom and flexibility, and I’m rewarded for my expertise.
A job however might be something I create, but it is really trading your time for money. The enterprise is dependent on you doing all the work. If you’re not there then no work is done and no money generated.
Now there is nothing wrong with creating a job versus owning a business, and most businesses start with someone first creating a job. Buying a job works when you are interested in an endeavour that’s shorter term, more predictable or less draining. Building a business is much longer term and visionary, and require you to pace your energy and seek out support that will expand your capacity.
So, how do you transition from a job to a business? Well it takes time and like most things is hard at the start but gets easier over time. Four quick tips: –
- Identify and then develop your niche – if you’re a plumber are you a residential plumber, or just work for volume builders, or a commercial plumber, or target retirees? Don’t try to be all things to all people.
- Be aware if you’re trading time for money – if you’re pricing jobs based on time it will take you to complete the job, then you’re not rewarding yourself for your true expertise, experience, or overheads. Consider looking at the pricing for a job as how is your expertise worth, and how much you want to make from the project. This will change the way you view the relationship with your client and make you aware that you provide the client is more than just time.
- Diversify your revenue stream – Now I’ve been guilty of this so I give you this tip with firsthand experience. When you start a business, you might end up with an ‘anchor client’ – a client that say makes up the majority of your revenue. They are great as it gives you a sense of stability, and you are exceedingly grateful for their business and support. However, anchor clients can be dangerous. It’s easy to become dependent on a single client and think they’ll be there forever. It can lead to apathy when it comes to prospecting for and developing new clients. With anchor clients, the relationship is different and can become more akin to that of an employee/employer relationship.
- Systemise – I think most people know that if they systemise and document things then the process becomes more efficient and effective. Most people however will not put a little effort into systemising their business. But without systemising your business you will never transition from buying a job to building a business – that I can guarantee. And if you want another incentive to systemise your business then in doing so you’re create an asset in your business than can be worth far more than the value of your time spent systemising your business (and also systemising will enable you to have that relaxing holiday in Bali!).
Feeling overwhelmed now about transition from buying a job to building a business? Contact us at Byronvale Advisors – we’ll have an obligation free chat with you about your business and how we can assist with the transition process. Chick here to connect with us.