Thursday, May 31, 2012

Working in Your Business or Working on Your Business

Yesterday I was asked to be the guest speaker at a networking event. The topic I was asked to talk about was “what it looks like when small business owners are working in their business and not on their business”.

I was also interviewed this morning by a journalist for one of Australia’s leading national business publications in relation to the same subject. As I discussed with him, unless you as a business owner can remove yourself from the day-to-day operations, you don’t have a business, you have given yourself a job. The key difference is that the boss won’t complain if you arrive late, leave early or take a day off. That is not entirely a good difference as it touches on one of the main challenges business owners face, namely ACCOUNTABILITY!!!

The focus of the interview however was mainly around processes and systems and I found one of the questions particularly interesting. The question was whether accountants are one of the best advisors for small business to help them with their processes, systems, and working on not in their business more generally. My experience is this: 
  • By looking at the business processes strategically it is possible to double company profits of most SME's within 12 months. 
  • You can generate more profits by either saving on costs (a finite approach but definitely worth doing) or generating more revenue (infinite possibilities) .... or both, and it is this third way that has the potential for exponential growth due to the synergistic effect of the two at once.
  • More efficiency creates opportunity for both more effectiveness and more productivity (more income with the same resources) and the systems that deliver that efficiency provide for rapid integration of new resources to increase revenue even further.
This is partly why accountants are not the best to advise business owners in this way. They are good at strategic financial processes! But that is only one aspect of the business; an important one but back-office and not front-line. 

CFO's (the accountants of big business) are taking on more important roles in large companies and in SME's external accountants are riding this wave. The key difference is that CFO's are focused on what they do best, critical evaluation of numbers, creative manipulation of those numbers within the relevant frameworks (e.g. tax, compliance, governance) and risk analysis in terms of financial exposure. Accountants try to be more and the average small business owner working in his business not on it, like a man dying of thirst in the dessert will gladly accept a drink from the first person to pass. 

But a tiger cannot change his stripes, and whilst every bit as regal as a lion, a tiger will never be a lion. If he does he was probably always a lion who at one point walked through tar-soaked underbrush. The same can be said for accountants and entrepreneurs.

About Paul J. Lange:
Paul J. Lange is a business mentor and business performance coach who helps small to medium enterprise and entrepreneurs to apply big business, enterprise disciplines and solutions to gain a competitive advantage and increase profits. 

Paul's 'Business DIET'© system has helped countless entrepreneurs and business owners around the world to launch start-ups, expand existing operations, and greatly improve bottom lines.

Paul is also one of Australia’s most connected management consultants, and leading business strategists, with a passion for helping corporate leaders, entrepreneurs and business owners who are committed to achieving outstanding results.

Paul’s support will help you to develop strategic direction, implement it, execute and make more money. He will have you starting to work on your business, instead of in your business, right from day one; and if you have already started down this path, he will help you to complete the transition to business owner from business manager.

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