3 Eyes of The Entrepreneur
One of the biggest complaints I hear from business owners is that they find themselves working every waking hour in their business, often at the expense of precious time with their family, but at the same time they are not seeing the results in their business they want. They are not as profitable as they believe they should be given how hard they work. A few curious questions on my part and I will nearly always learn that the business owner is indeed working a lot of hours, but they are not spending their time as wisely as they could to reach their goals.
A rule that I learned from Brian Tracy is that the business owner shouldn’t do anything that someone else at a lower wage can do. The business owner should be focusing their time on things that only they can do, and if done well, will have a positive impact on their business and therefore their life.
As an accountant, of course I can argue the other side of this. There are times when there simply is not enough working capital to have all the staff required to do everything you may want. However, I would propose that even when that is the case, the business owner must learn to prioritize the tasks that can build their business and allow themselves to be stuck in the role of doing the tasks they are comfortable doing.
Michael Gerber explains this concept very well in his book E-Myth Revisted where he discusses the 3 eyes of the entrepreneur – technician, manager and entrepreneur. It’s a concept that I review with almost all my clients, and I’ll summarize here.
Many small business owners start a small business in a field or trade they know well. Plumbers start a plumbing business, accountants start an accounting practice, bakers start a bakery. These business owners spend most of their day doing their trade. It’s what they know, and they are very good at it. They are focused on the here and now. Typically, I have found 85% or more of the business owner’s day is spent as a technician – executing the tasks of the trade. When working as a technician, their earning power is limited to the comparable hourly wage of someone they could hire to do this job.
When the small business owner is working as a manager, they are spending their time focused on analyzing the past. They are looking at financial reports, sales reports, and their KPI’s. They are managing and leading their teams. They find themselves asking “what has happened… and how do I fix it”. Typically, I have found that about 10% of the small business owner’s day is spent as a manager. Working as a manager, their earning power is limited to the comparable hourly wage of someone they could hire to do this job.
When working as a technician or manager, the business owner is working “in the business”.
When the business owner is working as an entrepreneur, they are working on building the future of the business. They are looking at the what, where, and how of the future of the business. They are strategizing, planning and executing actions to grow the business. The earning potential when working as an entrepreneur is unlimited. Yet when I ask small business owners how much time they devote to entrepreneurial tasks it is rarely more than 5%.
Therein lies the connection between the original complaint of being way too busy but not seeing the results in the business. More hours worked does not mean more profitability. Less hours worked on the lower value tasks and more hours worked on the higher value tasks is the key. Imagine the growth possible in the business if the owner spent less time as the technician and more time as the entrepreneur – working on their business rather than in it?
Where to Start?
If the business owner can focus on making incremental changes in the following areas, they will see the results in their business and their life:
- Time Management
- Task Prioritization
These topics will be addressed in upcoming blog posts. However, if you have any questions, please feel free to reach out to me. Email me at email@example.com.