How Safe Is Your Income?

When your income is dependent on your availability, your income is never fully safe. Your wealth is threatened. Your happiness is threatened.

Just like there is no such thing as job security for an employee, there is no such thing as income security for an owner/operator.

This thought was driven home to me recently while I listened to an acquaintance's story. He gave me a perfect example of the threat business owners face when they ARE the business. He granted me permission to share his story with you.

Gary owned a remodeling company. He met with leads, priced and sold the work, did the carpentry, oversaw the subs, sent out the invoices, and paid the bills. He was a typical owner/operator.

He loved the work. His two employees were easy to manage. He was his own boss. He set his own hours. His two employees were easy to manage. He didn't have to worry about someone disappointing his client or costing him money because he controlled everything.

Gary had a thriving business going. His superior craftsmanship and hands-on customer service earned him a great reputation and produced a flood of referrals.

Gary was purposely staying small. He didn't want the headaches of finding and managing workers and trusting their ability to meet his expectations. He was at his maximum work load and was quite happy about it. He and his wife enjoyed a very comfortable lifestyle that had no end in sight.

Ah, but life never is that easy is it?

Gary fell off of a roof, spent several weeks in a hospital and couldn't work for a year. His business couldn't function without his hands-on involvement. He lost his only source of income - and he lost everything else. Gary was forced to declare bankruptcy. That is the ultimate threat to the owner/operator. Complete financial destruction.

Unless your company can run itself, your financial security is ALWAYS at risk. ALWAYS.

Think of this article as your personal hurricane warning system. The hurricane may miss you or it may hit you. At this point, neither one of us knows which course it's going to run.

This is not an attempt to frighten you. It's an attempt to open your eyes to a threat that you may never have sufficiently considered. The need to build a business that is self-managing.

Do you have a choice? Yes.
Is it a painful choice? It can be.
Is it an easy journey? Not for most.
What choice should you make? That's up to you.

Allow me a moment to show you what a self-managing business looks like:

A self-managing business is one in which your daily involvement is not needed; one where your marketing system creates good leads; one where your sales staff meets with prospects, qualifies their fit to your business, and closes deals at attractive prices; and one where your operations team gets the work installed per budget and schedule.

It's a business that you can monitor from out-of-state (or in a hospital bed) via computer, fax machine and telephone. It's a business that continues to spin off cash whether you are there or not. Now, that's a self-managed business.

There is a famous Warren Buffett quote in which he describes the type of business investors should look for, "You should invest in a business that even a fool can run, because someday a fool will." Warren was describing a business that is so strong, it doesn't need superior leadership to keep the profits flowing. That's the type of business that gives it's owners income protection.

Now, there has been much ink spilled over how to create such a business, the most common advice being "install systems." Well, the easiest way to do that is to perfect them yourself then teach someone else how to do perform them.

Here's the basic sequence for building your business:

1st step: Perfect your lead generation process.
2nd step: Perfect your selling approach.
3rd step: Perfect your method for getting the work done.
4th step: Bring in foremen and teach them how to produce the work.
5th step: Bring in a salesman, teach him how to sell, and pay him for profitable sales.
6th step: Bring in an operations manager / estimator to run the work.
7th step: Put in place tracking systems to key an eye on EVERYTHING and EVERYONE.

If all the other wonderful benefits of owning a self- managing business fail to inspire you to build one, income protection should be enough incentive for you to put forth the required effort.

Ron Roberts, The Contractor's Business Coach, teaches contractors how to turn their business into a profit spewing machine. To receive Ron's FREE Contractor Best Practices Newsletter visit www.FilthyRichContractor.com.

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