Working IN your business means being a revenue-producing, product-fulfilling member of the team.
Working ON your business means designing, planning, refining your business, but not directly producing revenue.
Independent consultants typically work IN their business.
When you’re a lone independent consultant or contractor, it’s easy to fall into the trap of spending all your time working IN your business. You find one or two good clients, and they’re willing to buy as much of your time as they can get. You work for them long hours, maybe 40-60 hours per week.
Then one of them changes tacks, and doesn’t want your services anymore.
Suddenly your income plummets, and you have to replace them, fast. You scramble, make lots of phone calls, pay a fortune for outbound marketing, and desperately try to bring in a new client – but you don’t have any leads, because you haven’t been working ON your business.
Growing past one consultant usually requires a ton of work ON the business.
Not only do you need to build your inbound sales lead pipeline long before you run out of clients, but you also have to put in a ton of planning to:
- Build a process for future employees to follow
- Hire the right employees
- Manage their product delivery and their personal growth
- And worse, scale it fast enough that you can hire a manager to do all this stuff (because technically this isn’t really working ON the business either)
And you’re not getting paid for any of this – it’s all just an investment for the long term. As a solo founder, it’s extremely hard to financially afford to pull this off because you’ve also gotta put bread on the table for your family. You have to work IN the business in order to bring in revenue, work ON the business to get ready for the next level, and take care of your own health and your loved ones.
There are shortcuts: let other people work ON your business.
If you don’t want to deal with designing a product or managing people, you can hire wildly overqualified, self-managed people to pave the road as they go. However, you’ve gotta make them really happy – they’re building your business for you, and if they’re unhappy, they simply bail and do it on their own.
If you don’t want to deal with bringing in customers, you can attach yourself to a larger company who wants to offload work. There are plenty of smaller consulting firms that just pick up leads that bigger companies don’t want to hassle with, or can’t find the skills to deliver. The Microsoft Partner program is a great example of this – you can make a good living picking up their leftovers. However, you lose some flexibility in setting your rates and picking your perfect customer.
If you don’t want to deal with managing finances, you can hire a business manager who watches your top line, bottom line, and connects the dots. They’ll make sure you have as many profitable customer engagements as possible, and alert you to when you should change tacks. However, if they’re not savvy – or if they’re only driven by by short-term bonuses – they can drain you dry. (The entertainment industry is full of stories about horrible personal managers who bankrupted stars.)
The more things you find yourself outsourcing and offloading to someone else, the more it’s time to think about whether you really want to grow the business – or whether you’d be better off staying small with a lifestyle business rather than aiming for growth.