May Day, May Day, We’re going down

Sorry, a terrible play on words. I’d like to focus on and share my thoughts in regards to why so many businesses find themselves in difficulty and sadly why some fail and go down. Whilst it may be a cheesy title it does have a story. When a ship finds itself in trouble it will always put out a distress call, sadly the same can not be said for business who find themselves in difficult waters.

It’s interesting that the analogy of a ship works really well when look at running a business, stay with me!

For argument’s sake, we are going assume you as a business owner and as such the captain of your ‘business’ ship. With that in mind, where would the Captain have focus and position themselves? As the Captain of your business, you’ll find it very difficult to run it from anywhere other than the bridge. Yet the reality often finds the business owners anywhere on the ship other than ON the bridge. Rather they will be working IN the ship. More often than not shovelling coal and stocking the fire. The analogy here is the difference between working ON your business or working IN your business.

Let’s be clear here and stress the difference between the two. When you are working IN your business your position will be closer to that of an employee and you will predominantly own a job. You will be focused on delivering your service and product, you will be the default setting for the team to solve their problems, in all likelihood the same for the customers. You will be all things to all things. When we have focus ON the business there begins the shift towards owning a business. Now I concede it is not one or the other, though you do need balance as you grow your business. When you’re ON the bridge you’ll have a strategic view of what’s going ON within the business and be able to lead the team. You’ll be focused on the horizon, and have set course for the business, be able to monitor the ship’s resources to run efficiently and be able to avoid or prepare for obstacles and stormy waters ahead.

Now I understand that we do not live in a utopic world where you can spend all of your time on the bridge focusing on the business. As a small business, you will need to create balance, having one hand on the tiller maintaining the direction of the business, whilst ensuring the business delivers its cargo where and when it should and there is enough coal in the furnace to propel you forward. That’s one reason I always challenge business owners to spend at least 5 hours a week focusing ON their business.

‘5 hours Steve where’s that coming from?’ I hear you yelling. One hour per day. Now I’m absolutely clear you could find one hour per day if you’re not already.  As your business develops, your crew expands you will find you are able to spend more time, if not all your time on the bridge. Sounds simple, well the reality is starkly different, as a business coach I am really clear just how difficult it is to get to the bridge. So what can you do to spend more time ON your bridge? The following exercise will help you to determine where you add value to your business. First, we need to have an idea of just what your time is worth, here’s how:

Calculate your Annual Earnings £……….

Divide by 1760 (220 days x 8 = 1760 work hours per week)

= £………. your hourly rate

Once you have established what your hourly rate is you can start to see where you add value to your business. The Skills versus Fun/Interest matrix is a very simple way of determining if what and where your focus IN the business adds value as the business owner. So if you spend time in the low skill low fun quadrant you will be undertaking jobs the business owner shouldn’t. Working IN the business. This could include administration, basic financial accounting, some marketing activities etc. Essentially tasks which you don’t much enjoy and where someone with greater skills would offer a far greater ROI. As you move towards the High Skill and High Fun/Interest you are likely going to be adding value as the earning potential vastly increase in direct proportion to the business. Being ON the Bridge!

All too often Business Owner immersed IN their businesses feel they are adding value and working really hard. When in actual fact they are shovelling coal into the furnaces, maybe fighting fires! One thing is sure they will not have an eye on the horizon or be aware of potential hazards ahead. Getting the balance of working IN and ON the business, essentially getting to the bridge avoids having to be in a position to put out a ‘May Day’ business in distress call.

Now there’s a challenging thought!

If you want to take a look at whats happening IN your business right now then why not take my Business Health Check.