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This question seems to be a conversation piece that is coming up a lot in recent meetings with entrepreneurs. It’s a funny question because most entrepreneurs think they are building a business but spend their days working in their business in an actual role that they could hire out. By working in the business as an employee, the owner of a business is not being paid for the risks being taken and there is no real value being created. Generally speaking, employers look to leverage the cost of an employee to produce a return. For example, if your business pays an employee $1 you would expect to earn back the $1 plus some amount of profit to compensate you for the risk you assume running the business. The risks you assume should line up with the value you believe you can build. If your product or service is priced right and you have a stable customer base, then a business owner should be able to generate money and value without needing to do any of the work themselves. So why do business owners get stuck being employees?
I think this happens because many businesses are started by an individual that does every job and as the business grows they delegate job tasks as their available time shrinks so they can free up more time. Like most things in life, 90% of something is easy to do and the last 10% is harder to do than the first 90%. When an entrepreneur has handed off 90% of their workload they fail to hand off the last 10% because they lack a sense of how to spend their time if they weren’t in an actual role. When a business gets to this stage an entrepreneur needs to redefine their role based on their goals. One of the goals should be to build a valuable business that is healthy, stable and in a position to be a leader in their market or market niche. To achieve this, the entrepreneur needs to elevate themselves to a permanent position of leadership and spend their time on strategic activities that produce new tactics the business can use to get to where they want to be. This may involve seeking outside help to address the opportunities and challenges that an entrepreneur sees.
“Entrepreneurs are innovators who use a process of shattering the status quo of the existing products and services, to set up new products, new services.” — Joseph Schumpeter
I use the word entrepreneur a lot and some of the individuals I interact with feel uncomfortable using the word. They consider themselves business owners who are simply providing a product or service to the market and aren’t doing anything innovative or unique. Whether someone considers themselves an entrepreneur or not, the question remains the same but deserves some consideration. If you have a business that looks more like a job then you need to ask yourself:
“Am I being paid appropriately for the work I am doing and the risks I am taking?”
If you make the decision to be an employee in your business then understand that your business will only be as valuable as the time you make available to do your job. If you want to create a business that has actual value then begin by defining your existing role and what is needed to hand it off now or in the future. Maybe you need to grow your customer base before you can move to a strategic leadership position or maybe you need to increase your profit margin to free up the capital needed to pay for another employee. Whatever the needs are start today by making a decision to not be an employee in your business and to create something valuable. Lead the team you have in a way that will result in a stable and healthy business that will be in the market for years to come providing jobs and value to the community.