Most small business owners have no clue what they’re doing. They know how to deliver the product that their customers buy, but they don’t know how to run a business. As a result, they end up working themselves to death and their business really doesn’t operate or grow like it should.

I had a friend that I used to work with that was very good at what he did. He was tired of working the 9-5 and “lining the company’s pockets”. His theory was simple: the company hired him out to our customers for more than $200/hour but his salary was closer to $50/hour. His thinking was that if he went off on his own, he could charge $75/hour: giving himself a “huge raise” and saving his customers a ton of money. This was also his strategy for competing with his current employer. I just want to drive something home - this guy was one of the best in the industry at what he did. Period.

Let me tell you how it worked out…

He quit. He started a consulting company. He couldn’t get any clients to sign on with him. At least not right away. He eventually did start getting clients, but they weren’t the sort of clients he was used to working with and by the time they started rolling in, he’d racked up a lot of credit card debt. After about a year and half of this he was working 16+ hour days and making less money. Working twice the hours. How did that happen? Because he had no clue how to run a business…

What my friend soon discovered is that someone had to deal with the bookkeeping. Someone had to generate the invoices and chase the receivables (and he had a lot of clients that were slow or downright delinquent) . Someone had to try and attract new clients. Someone had to try and sell services to those clients. He was the only someone. Oh yeah, and with whatever was left, he had to try and do the job for the client that he left his 9-5 to do.

He had no idea how to do the books. He had no idea how to market himself and didn’t like selling. Needless to say, his business failed before hitting the two year mark.

Do you see the problem here?

He didn’t own a business, his business owned him…he was an employee of his own business instead of the owner of that business. Because he was too mired in the day-to-day crap of running things and performing the services for his clients, he had no time to lift his head up and take survey of what his business should be doing.

There were two big problems with his approach…one was that doing a trade and running a business for that trade are two entirely different skillsets. He failed to understand this and so his business was never planned and orchestrated correctly from the beginning. Second was that nothing was systematized. Nothing was automated (mostly because there was no plan from which to automate anything).

That was a long time ago. Had I known then what I know now, I might have been able to save him and his business. We’ll never know…

Welcome back again!