There is a question that often gets asked, particularly of small business owners. That is: Are you working “on” the business or working “in” the business? While the distinction may sound small, it is critically important.
Too many small business owners find themselves working “in” the business. This means they are working on day to day operational issues. They are interacting with customers, employees and vendors. They are dealing with near term financial issues. They may actually be responsible for a major functional area of the business rather than having someone take care of it for them and only involve them in key decisions.
While resources are always tight in small businesses (they are also tight in well run large businesses), if a business is to rise to the next level, a substantial amount of time must be spent thinking and acting on the issues that will help the business get there. This is what is generally meant as working “on” the business.
Working on the business is about opening up new sales & distribution channels as opposed to chasing the next sale. It is working with your team to develop a long range strategic & financial plan. It is understanding the sustainable growth model of the business (see last month’s newsletter). It is having discussions with the Board about forming strategic alliances that could help the company in the long term. It is thinking about where the market is going and being ready for (or leading) marketplace shifts that you see occurring. It is about understanding what the customer needs, how they perceive your product or service against those needs, and how you can deliver better against any gap. It is about understanding the overall competitive landscape. And it is about understanding the enterprise value that you are creating.
Obviously, I could go on and site countless examples of activities that have more to do with working on the business than in the business. The key point, however, is that unless the CEO and top management team spend time and energy working on long term strategic business issues, they are likely to find themselves doing the same thing over and over year after year with about the same result. A good business doesn’t stand still. It is always striving to move forward.
When resources are tight and time is limited (both of which are usually the case) it is always difficult to find time for issues which are don’t impact the business today or tomorrow. But without the foresight to focus on the “the bigger picture”, it is unlikely that the business will move forward in any meaningful way.
Ask yourself: What you are doing today which will alter the course of your business over the next three to five years? If the answer is “nothing” then carve out the time to tackle some of the longer term issues that are important to the business. You’ll be glad that you did!
If your business could benefit from fractional CFO services, I would welcome the chance to speak with you. Please give me a call at (314) 863-6637 or send an email to