How to achieve financial freedom and sleep at night
We all want both of these things, but we all know that our businesses cannot stay as they are. They have to evolve to meet changing conditions. That implies they need a constant input. We also think that our businesses have to grow, and we find that difficult. We’ve discussed this regularly, summarised here.
Growing and achieving financial freedom brings its own challenges. As businesses grow, they get to a squeeze point where all the decisions are channelled through one place, which is normally you. If you’re not careful, you become the bottleneck and have to make all the decisions which leads to growth slowing down. It gets increasingly hard to make any progress. Some business owners argue that no one can do the job as well as they can. That’s a spurious argument. It simply means they don’t invest in training their people. Sometimes ego gets in the way as well. We all want to feel important and worthwhile, but we can’t do that at the expense of the business and our mental health. That’s what suffers if we end up being the bottleneck.
This is where ‘zero decisions’ comes in. This isn’t literally no decisions ever, but it is no day-to-day decisions. Your people should be doing this. They should be empowered to make good decisions with the information necessary to do that. Look back to 5 steps to scaling your business. The structure is there. You need to determine the workflows, set the procedures, train your people, monitor the results, and integrate it all into your accounting and reporting systems.
You don’t need to do it all, because if you do, don’t expect the business to grow.
The only decisions you should be taking are strategic ones. When we have strategy planning sessions with our clients there is a section on management. Our clients describe what percentage of time they are spending between strategic planning, management, and operational matters. Commonly that is 5% strategic, 20% management, 75% operational, and they don’t like it. Together we plan to reverse those percentages in three to five years..
Doing that gives you time to think about the business.
Working ON your business, not IN your business is your job.
Part of how you can empower your team to make the decisions, as well as the 5 stage structure, is to recognise that most of the time they are customer facing. They have to be empowered to sort out customer issues and also to be curious about what customers’ needs are and how they want your product or service to be delivered.
That’s back to knowing the job to be done. If your team knows the job to be done, they can suggest innovations and improvements, they can test it with the customer and then bring the new idea to you for your strategic input. And obviously for smallish issues, they should be empowered to fix them even if it means giving some money away. Always keep in mind that keeping a customer is a lot cheaper than getting a new one.
This is zero distance. It means zero distance to customer.
It is one of the main advantages of a small business. They know their customers so well that it is very difficult for a competitor to attack their customer base. Make sure you capitalise on this advantage. Make sure you do not spend your time on the wrong things.
Work towards zero decisions and zero distance. It’s what we spend time on in helping our clients so that they achieve their ultimate goals. We always remember (and remind clients) that their business is a tool for them as individuals and their families to achieve their life goals, so they end up with a life work balance that works for them.
At Hixsons we make sure our clients are agile, flexible and resilient so that they are better able to respond to shocks. In the spirit of helping our business community we have resources in our learning centre where you will find various tools and templates for your business. We do not ask for your data and it’s completely free.