A few days ago, I attended the first Digital Business Bash here in Charlotte. (In case you missed it, I told you about it in this post.) Here I am (middle) with IBN member Lela Barker of Bella Lucce (left) in South Carolina and Susan Lassiter-Lyons (right) of Investor Insights in Colorado.
Our speaker was Jeff Wolfberg of CEO Focus, and his topic was Strategies for Real Growth: What Got You Here Will Not Get You There. During the Q&A, I asked Jeff what he saw as the biggest mistakes entrepreneurs make when taking their businesses from a one-person operation to one with employees. Here's some of what he said.
1. Failure to fully delegate
Jeff said that entrepreneurs are notorious for delegating bits and pieces of tasks, but not turning over full ownership. When you keep some stuff for yourself, Jeff says, you never really fully free yourself up for more important tasks. Moreover, the person who is supposed to do the job never feels comfortable and competent performing it efficiently and effectively because it's not really “his” or “hers.”
2. Hiring contractors instead of employees
Jeff said that hiring contractors and not employees is a big mistake. Contractors never feel fully vested in and responsible for a business, so they tend not to perform in the same way as employees do.
Jeff also said that relying too heavily on contractors can devalue a business. He cited an example of a time he worked as a consultant to help prepare a business for sale to a highly motivated buyer. When the buyer discovered that most of the work was done by contractors, he lowered his offer significantly (by millions) because he did not feel comfortable purchasing a company run almost completely by contracted workers.
3. Failing to plan at least three years out
Strategic planning is a necessary part of growth and survival, even for the smallest business. Jeff says that planning things out by the month, leaving the years to take care of themselves, is a disaster waiting to happen. He recommends planning three to fives years out, and tweaking it as you go.
Applying Jeff's Advice to Handmade Entrepreneurs
For handmade entrepreneurs, I want to make a few points of reassurance. You may read Jeff's comments and think they are not relevant to you. After all, if you make your products yourself, how can you delegate, wholesale-style, the manufacturing of those products to third parties? How can you hire someone when it's so much easier (and less expensive and less headache) to hire virtual contractors or assistants instead?
Here are few things to keep in mind as you consider Jeff's advice in your particular situation.
First, there's nothing wrong with hiring contractors, especially as you get your business off the ground. Hiring contractors gives you a period of time to tweak a position and develop it fully so that, by the time you are ready to hire someone, you have most (if not all) of the details of the position ironed out.
Second, Yes, you can hire people help you with online marketing. For most handmade entrepreneurs, this can be done well with contractors. Online marketing tends to be repetitive and somewhat predictable, making a percentage of it (not all of it) easily delegable to a contractor under your supervision and leadership.
Finally, I agree with Jeff that long-term strategic planning is a big whole for most handmade entrepreneurs. Sometimes, we are so busy making what we plan to sell next week, or tweaking how we will appear at next month's farmer's market that we cannot see the forest for the trees. Yes, you have to be ready for shows, and yes, you have to have product on the shelf. But you also need a vision for specifically where all of it is going. Do you want to be doing exactly what you are doing now for the rest of your life? If not, you've got to plan things out long term. Nothing will be set in stone of course — life happens and plans change. But the general big picture has to be there. Otherwise, you risk being stuck where you are at the very time you are ready to move away from it.
What do you think of Jeff's advice? My commentary? I'd love to hear your tips in the comments below.