Me: “DO NOT BUY TRUCK.” It was my text to a client who was trying to scale his business. (He knew I was serious because I used all capital letters.)
Client: “Good price - need dependable truck for new hire.”
Me: “You have one - he can drive Ford you used to drive.”
Client, several hours later: “I bought truck.”
Me: ”I guess you’ll learn the hard way.”
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Just after I graduated from college and long before I learned the need for a cash reserve, I learned to fly small airplanes. At the time, I had enough money to rent an airplane, but not enough to rent the airplane AND pay for a full tank of gas. One afternoon my former instructor approached after overhearing me order a half-tank of fuel. “It’s okay to fly on a half tank,” she said, “so long as you run out of the top half of the tank, not the bottom.”
I often quote my instructor to business coaching clients because gas to an airplane is like cash to a business.
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“Martin, I’ve had it with growing my business and your push-through stuff. ” It was a text from a client. I called him.
“What’s up?” I asked.
“I’m going back to just me. I can’t depend on these guys I hired. If they show up, they mess up. I spend most of my time fixing their screw-ups, and I still have all of my work to do. They’re ruining my reputation, I’m out of cash, and I couldn’t pay myself last week. My life was better when it was just me. A lot better.”
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As a business owner, do you have to go to work? If you do, you are trading time for money, and that’s the definition of a job. Business owners should earn distribution checks, not paychecks.
A paycheck is compensation for time spent at work.
A distribution check is compensation for accepting the risk and responsibilities of ownership.
Distributions are a return on investment, which has nothing to do with going to work.
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A lot more of us understand the benefits of delegation than are fully committed to it. I hear a lot of reasons for that, including the ones we’ve all heard: “If you want something done right, you have to do it yourself,” or “Nobody can do it as well as I can,” or “It takes time to train these guys, and I don’t have time.”
There is some truth to all of those excuses, but the main reason we don’t delegate is that we don’t know how to get started writing good systems and processes.
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At the junction of Interstate 80 and Highway 281 in Nebraska, stands a convenience store with a large, well-lit sign. The sign reads “We Have the Best-Looking Cashiers.” Customers judge the offer you put before them, then compare it to your competitors’ offers. If there is no meaningful difference, customers base their buying decisions on price...
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The unwillingness - or inability - to delegate is a principle reason that fewer than 5% of the 28.8 million businesses in the United States ever reach $1 million in sales and fewer than 20% of them have even a single paid employee.
However, we can’t delegate by simply handing off authority and responsibility and instructing our teams to “figure it out.” Doing it right is a process.
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Many of us go to work on the first day of the month believing everybody’s making a little money that day, and the next, and the next after that. Every day we make a little profit; our employees make their wages; our landlord makes some rent; our suppliers, insurance providers, utility companies, and all the people we do business with earn their daily cut.
That’s true of everyone else, but it’s not true about us.
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“So, what do you want?” That’s the first of three serious questions I ask prospective clients. The answer is usually missing from a conversation that goes something like this:
Client: “What do you mean?’
Me: “I mean what do you want?”
Client: “Do you mean for me or the business?”
Me: “Either or both.”
Client: “That’s hard to say... Wow, that’s a really great question….”
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