Why The DIY Entrepreneur Stalls
Being a “Do It Yourself” entrepreneur (“DIY”) has many advantages. It’s one way to get things done quickly, inexpensively, and without the involvement of others. It also saves one from having to explain things in detail to those who may not fully understand the problem. A DIY problem solver also benefits through opportunities to apply their existing skills and develop new skills as part of their lifelong learning plan. While all this is true, DIY entrepreneurs face many dangers when running a growing business.
Adopting a DIY approach to running a business is really important when the business is new and money is scarce. During start-up, a business is in flux; the entrepreneur needs to be on top of everything – wearing many hats concurrently. This is generally a necessity as staff have not been hired or tasks cannot be delegated because they are poorly defined.
While the DIY may be successful during start-up – pulled forward by a good idea – the business is bound to stall during ramp-up unless the leader can establish an environment to delegate responsibility and work to others in the growing organization. This tipping point represents the need to create processes and systems to control operational activities. There are simply too many contact points and the stakes are too high to operate using trust-based verbal communications. Structure is required.
“Structure is inversely proportional to trust; trust is undermined by size.” Put another way, as the business grows it is impossible to trust everyone because the number of moving parts increases. Verbal communications become repetitive and inefficient - mistakes are made. Structure, in the form of an effective management system, is necessary to prevent the organization from choking on its own success. Once implemented, these systems mature naturally as the organization increases in complexity.
The DIY entrepreneur needs to recognize when they are the bottleneck. They have to identify ways to “let go” so others can run the business. This requires developing documentation that describes strategies to align, processes to operate efficiently, and metrics to motivate the right behaviour.
In summary, a growing business needs to be nimble while using its resources efficiently. The business will stall if the DIY entrepreneur cannot evolve into a “DIY manager” someone who is comfortable stepping away from operations so they can work on the business, not in the business.
How do you know if you have made the transition and your business is running well? Here’s a hint: You slept well, your desk is clear, and you are considering expanding into New York. Why, because last month’s management report indicated stable operations and forecasts a growing profit.
Some Tips For The DIY Entrepreneur:
- Recognize that you are not the expert of everything.
- Recognize when you are the bottleneck.
- Stop (avoid) doing the work of others – this takes you away from more important activities. Put a value to your time (An internal rate of $100/hr at least) and delegate work to others who can do it for less. Spend your time on high-value activities.
- Defines performance metrics for the organization’s teams. Measure the team against these.
- Formally implement a business management system. Use the system to manage delegations.
- Engage experts when technical expertise is needed.
- Recognize that your job is to lead and create an environment for your teams to excel.
Abinsi’s consulting team helps businesses grow through shaping attitudes, designing effective operational structures, and implementing management systems. We offer a complimentary 90-minute discovery session to explore how we can increase your revenue and profit. We engage through assessments, management coaching, and one-time improvement projects. Give us a call to book an appointment.