Escaping the “Self-Employment Trap”
Many entrepreneurs, write the authors of Scale: Seven Proven Principles to Grow Your Business and Get Your Life Back, don’t know the difference between growing a business and “growing a job.” A job is the responsibility of one person. In contrast, a business functions through a number of individuals in key roles, each with their own sets of responsibilities. In other words, authors Jeff Hoffman and David Finkel write, if as an entrepreneur you are working 70 hours a week because you alone are still responsible for the four core systems of your business finding prospects, closing sales, producing and delivering the product, and collecting on what you are owed you haven’t built a business, you’ve built a job. And sustaining such a job is not possible unless you sacrifice other aspects of your life.
The Self-Employment Trap
In Scale, Hoffman and Finkel lay out seven principles to help entrepreneurs escape the trap of every aspect of the business moving through them — what they call “the self-employment trap.” The first principle is understanding the concept of building a business, not a job. To clearly lay out the difference, they offer a business growth model based on three levels:
Level One is the preparation for launching the business and includes the business plan and making sure the business is viable.
Level Two Early Stage is getting the business off the ground. This is when you start to build a customer base and reach profitability.
Level Two Middle Stage is when you escape the self-employment trap by starting to build out the four core systems described above. Level Two Advanced Stage is when you’ve established a management team, and the systems keep the company running.
Level Three is the exit stage: As an owner-entrepreneur, you can sell the business or be a passive (and proud) owner of the business you launched from scratch.
Many entrepreneurs stay stuck in Level Two Middle Stage because they are focused on operating the business — selling to prospects and delivering the product — and are not taking the time to build a base that will allow others to take over “the job” they are now doing alone. The remaining principles in Scale are intended to help entrepreneurs break out of Level Two Middle Stage.
Through principles two and three, entrepreneurs learn to build a solid foundation for future growth. Principle two covers systems and controls for the business, while principle three offers tools to clarify the market and identify competitors.
Principle four, “Create the Right Strategic Plan,” helps entrepreneurs to do their homework so they can pick the best strategy for their company. Principle five — “Learn to Read the World So You Build Tomorrow’s Marketplace,” is focused on keeping the company up to date.
In principle six, “Overcome the Predictable Obstacles to Scaling, Pillar by Pillar,” the authors show how to scale the sales and marketing, operations, finance, team and executive leadership pillars of the business.
The final principle is “You Do Have Time to Scale Your Company.” The authors offer a “time mastery system” that will refocus time and effort on tasks and responsibility of true value — and eliminate the work that you should not be doing in the first place.
Hoffman, a former CEO in the Priceline.com family of companies, and Finkel, a successful business coach, have written a practical guide filled with tools and methodologies — many available online — that will help many entrepreneurs finally break free of the exhausting and frustrating self-employment trap.