Welcome to business ownership. It all starts with a great idea. You do the market research and discover you’re onto something. Maybe you begin with a side hustle, but at some point, you quit your day job and launch. Congratulations, you own your own business. Now what?
Well, it turns out you’re not alone. In 2022 there were 955,861 registered small businesses in Australia. 98% of companies in Australia are SMEs, with micro businesses also on the rise over the last couple of years. We’re undeniably a small business nation, yet 60% fail within the first three years, and of those that fail, 50% are profitable.
So where’s the disconnect? We’re missing something, but what? Why do small businesses fail at such high rates? While it’s not down to one thing, unmet expectations and disappointed hopes are high on the list. Most people who go into business want to contribute to their community while creating freedom, fulfilment and flexibility for themselves and their families.
But instead of owning a business, it owns them. Life gets consumed by the demands of keeping the venture afloat. They’re physically, mentally, and emotionally exhausted, and families suffer. The longed-for freedom seems like a pipedream, and it feels easier to work for someone else.
You’re two people in your business.
Are you a Business Owner or Self-Employed?
It may seem strange, but I’d ask you to consider whether or not you’re behaving as a business owner. You own a business; that makes you a business owner, right? Technically, yes, but many who own businesses function primarily as
self-employed. It might sound like a trivial distinction, but it makes a world of difference for the future of your business.
For our purposes, a business owner is someone who
devotes anything from a few hours to a day a week working on their business, not just in it. That means you’re self-employed if you’re not allocating time to working on the big picture and moving your business forward.
Business owners think about creating value and building leverage to succeed commercially. Fundamentally, moving from being self-employed to being a business owner is about mindset and time allocation.
Self-Employment is about doing the do.
Self-employment works for people who love doing what they do. Many enjoy being hands-on in their field of expertise. For example, you may be a freelance writer, an allied health professional, or an artisan. You may have started your own business so you can specialise.
Remaining in the self-employment mode is an entirely viable option, and all I’d say to those embracing the self-employment model is, “Own it!”
Where does entrepreneurship fit?
Elon Musk defines an entrepreneur as “a person who sets up a business or businesses, taking on financial risks in the hope of profit.”
I’ve noticed many in the business world, including those who write about it for a living, use “business owner” and
“entrepreneur” interchangeably. I’d argue that yes, while every entrepreneur is at some point a business owner, not every business owner is an entrepreneur. And that’s okay! Many business owners feel the pressure to be entrepreneurial—to build fast, sell quickly, and move on.
True entrepreneurs are rare. They’re so future focussed that they’re always thinking about the next thing. Think Steve Jobs, Oprah Winfrey, Walt Disney, and Elon Musk. They’re often the founders and initial innovators in a company but are usually seized with the next big idea and launch again into the great unknown.
Entrepreneurs build to sell, while business owners build to hold.
So you want to be a business owner?
When you’re self-employed, you spend all your time working to sustain yourself and your family. On the other hand, business owners live primarily with the big picture. It’s not about what you’re doing – but what you oversee. As a result, you’re reflective and focused on building more than delivering.
If you’re not there yet, don’t despair. Moving towards business ownership is achieved in incremental steps, with the first being the ability to move seamlessly between functioning as an owner and an employee.
Your business is a living organism.
Think of your business as a living, breathing organism. Like any living thing, it requires nurturing to grow and mature. If not, it will stay as it is, and your dreams for the future will remain in the realm of fantasy.
Take, for instance, a writer. They may start out as a website copywriter, making enough to pay the bills but not allowing the time or space to write their epic fantasy trilogy. They may remain a self-employed copywriter and compose their trilogy, fuelled by caffeine and imagination during late nights, early mornings, and weekends.
Or, our writer can bring in junior copywriters, training and releasing them to produce website content. This frees them up to work on the business, expand into ghostwriting and editing, moving towards their dream.
They’re helping people tell their stories and empowering other writers while creating the life they want.
Doing the daily do.
In reality, you’ll spend a great deal of time working in your business, essentially functioning as an employee. But if you want more, you must devote time to working on your business, acting as an owner with a vision and plan for the future.
If you don’t, you’ll end up doing what I see so many doing—building to sell. What a waste! I’ve talked with many business owners who are so disappointed and disillusioned that they forfeit future earnings for a one-off financial payout.
I’ve realised this thinking stems from an “all or nothing” mentality. Business owners believe that they’re the funnel through which every idea, every point of administration, and every interaction with clients and customers must flow. In short, they’re stuck in self-employment with no perceived way out.
And I completely understand. I’ve been there, done that, and have the box of branded t-shirts to show for it! It’s what led me to develop Rest & Rhythm. But unfortunately, I learned the hard way, and it took me about ten years to get over myself and begin the journey from self-employment to business ownership.
What helped was realising it was okay to function as an employee, but with boundaries and always looking to create value, build leverage, and succeed commercially.
The Business Owner’s Challenge
As an Employee
|Here and Now|
As an Owner
|Ensure things get done|
The Business Owner’s Challenge.
Unless you understand you have two distinct roles, you’ll constantly trade one off against the other rather than make the most of both.
I’ve identified seven distinct differences between functioning as a business owner and an employee. The key is to be intentional. It’s about understanding the different personas and knowing which one you operate in at any given time. The bottom line is that you can’t keep doing the same thing and expect to magically transition from self-employment to true business ownership.
1. The View
Employees focus on the here and now, the day-to-day execution of the business owner’s vision. They’re all about operations and administration, which are vital if the business is going to succeed. You can’t execute the company’s vision without employees – whether they’re other people or yourself.
Employees rely on the business owner to set the direction and provide their creative boundaries. The clearer the vision, the more defined the parameters, and the greater the opportunity for employees to bring their best to the company.
If you’re too busy working as an employee, you’ll never get to the storytelling and innovation, the real work of the business owner.
2. The Perspective
Employees are concerned with keeping the business running. An employee is looking, almost exclusively, at the microcosm of their role within the company. They’re not paid to be concerned with the bigger picture. So, when we talk about an employee, we’re not talking about someone working as a CFO, CEO, or COO.
And there are seasons when you need to behave like an employee, concentrating on the day-to-day, particularly in the early stages of start-ups. For example, suppose you’re providing a service or product. In that case, there are times when you need to focus on sorting out that delivery issue or addressing the technical problem, working in rather than on your business.
Business owners are equally concerned with the overall market. You’re the operational executive in charge of innovation and marketing. You’re also a shareholder concerned with returns, so you must allocate time to keep across the market, watch for trends, and stay ahead of the curve.
Your perspective is that of a journey. That means you’re looking toward development, prepared to accept short-term pain for medium to long-term gains. That might look like hiring people now for what they will contribute in 12 months.
Once you have a business owner perspective, you can focus on creating momentum based on people and performance.
3. You think…
Employees generally think sequentially. They have part of the picture but certainly not the whole. They’re paid to complete tasks in sequence so that the service is provided, the order filled, and the customer or client satisfied.
Business owners think holistically. While it’s inevitable that you’ll need to think sequentially, the key for business owners is to have people whose job is to ensure that processes, procedures, manufacturing, and the like operate as they should.
You’ll need to be able to dip in and out of this space but commit more time to view the business as a whole, understanding your niche in the context of your industry and the broader economy.
If you can allocate time to both, your business will go from strength to strength.
4. You act…
Business owners ensure that things get done. A key to moving from behaving as an employee to the owner is to do the things only you can do.
You can do everything in your business. Unfortunately, that makes it tempting to believe that unless you do it, others won’t, or if they do, they won’t do it as well. However, you’ll only move from employee to business owner if you change this mindset.
Are you collecting and distributing the mail because it’s there and you can? Stop! Let your people do the jobs you hired them to do while you set the vision and become the Head of Marketing and
5. You function…
Business owners create and cast the vision, setting the course for the team. You’re responsible for bringing people on the journey and, ultimately, for marketing and innovation.
If you expect others to grab hold of the dream and run with it, you must write it down and make it plain. Your job is to inspire your team to help you create value, build leverage, and succeed
6. You manage…
Business owners need to know when it’s time to step away to concentrate on building the company. Can you separate yourself enough from the delivery of products and services to go to the next level? If everything relies on you – you’ll never move from effective self-employment.
Hire people who do things worse than you.
Of course, you know how to do everything in your business—it’s yours. But unless you’re willing to employ people who initially do things worse than you, you’ll stay exactly where you are.
7. You respond…
Employees exist in the space of movement and action. They’re paid to work within processes, procedures and systems that provide the best and most appropriate outcome for the client or customer.
Business owners must take time to reflect on the business as a whole, cultivating a business owner mindset. You must position yourself in relation and response to your industry and consumers’ changing needs and demands.
You know you’ve moved into actual business ownership when you understand that time is one of your most precious resources. It’s one of the most significant indicators that you’re thinking as a business owner instead of an employee. Your role is to allocate time rather than manage it.
Tell your story
The business owner’s role is to share the story of their business in a way that inspires customers and clients to engage and attracts employees who are great at what they do. The most successful companies are as focused on attracting and retaining the best people as they are on delivering quality products and services to their clients.
Embrace the challenge.
Ask yourself a few questions. Why did I go into business? What’s my Why? You can bring others on the journey if you know your purpose.
If you can navigate the tension between working in your business and working on it, you can take your business to whatever level you want. And if you treat time as a resource to be allocated rather than managed, you’ll be able to create value, build leverage, and ultimately succeed commercially.
But more than that, you’ll be able to bring others on the journey and create something that people want to partner with.