The Australian Small Business Blog

Monday, April 23, 2007

The Two Key Differences Between a Business & a Job

Many people work for themselves. They could be professionals, trades, consultants or a contractor providing a service. They could be one person organisations, or have 3 or 4 staff. But are these organisations really a business?

There are two key criteria to determine whether they own a business or a job.

1. Can their Business Survive without them?

Take the solo consultant as an extreme case. They are paid by the hour to perform work for others. Often they work for just a small group of clients. At times they can be very busy. But what happens when they are sick? Or when they want to take time off? The income stops.

Or the business could have half a dozen staff. But when the owner is away, sales fall off, or dry up completely. The business is still dependent on the owner.

In both cases, the owner owns a job. Not a business. No-one would pay anything for this business. The clients the owner has would be his personal clients, and probably would leave when the owner leaves.

When the company continues to make money even when the owner is away, and operates as if they were still there, then it becomes a valuable asset.

To make your business survive without you, it is necessary to bring systems into the business so that you can give away anything that is not Brain Surgery to someone else. You have to learn to leverage yourself.

2. Who does the Marketing?

I have heard owners say to me: “We provide a really good service, and I am not interested in the marketing. I just want to find someone to do the marketing for us, and we will provide the service.” That is, they are seeking to outsource marketing.

If someone else is doing the marketing for you, they could equally direct the business they generate to someone else. And those you work for are not your clients, they belong to the people who found them for you. You are effectively just a subcontractor. The marketer takes their cut, and you get the rest.

If you join a franchise that provides all the leads to you, when you leave, they keep the customer. This is not a business, it is a job. Someone will replace you when you go.

And if you rely on 1 or 2 sources of work for your business, you are depending on a relationship that may not survive a personnel change in the customer organisation. Like a job that has finished.

The second big difference between a job and a business, is the marketing. It is the marketing that creates the business. If someone else does the marketing, they have the business and you are working for them. In a job.

So take charge of your marketing, don’t leave it to chance, or worse, give it to someone else to do. It is part of your Brain Surgery. Which is why some businesses are purely Marketers outsourcing their whole service delivery. And who do you think makes the money?

So leverage yourself as much as possible, but never give away your marketing.

Dr Greg Chapman is the Director of Empower Business Solutions and The Australian Business Coaching Club and is a Business Coach and provides Coaching and Consulting advice to Australian Small Business Owners in Marketing & Business Strategies Planning & Systems.


Anonymous said...

What you mentioned is so exact. I easily understand your advice. Obviously, in China there are many small business like what you mentioned. Their owners can not be them away, because the sales or oprations will be gone down. However, I am interested in whether there are also many Australian small business that are facing the same problems.

Anonymous said...

from canada...

i think you've nailed a crucial issue here within the self-employment world. And i think it has to do with the fact that many self-employed people haven't switch their mindsets from an employee to truly being a business owner--i.e. the business is an entity of its own and must survive and thrive on it's own


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