There is a common fallacy in the business world that by working for yourself to earn an income and building a business are one and the same. For some readers, you may have already clarified the distinction between earning an income and building a successful business through your own career experience.
Most of you have probably consumed large quantities of business reading material and spent plenty of hours participating in business education programs. For some of you, the distinction between earning an income and building a successful business is a new concept.
Regardless of your background experience, we want you to understand that the distinction between earning an income and building a business, is a fundamental underpinning of our soon to be published book, Entrepreneur to CEO.
A dictionary search shows that the term, business, has many different meanings. For our purposes in this book we consider a business to be “an organization that has its own existence without being dependent on the existence of any one person or entity.” The term organization is inclusive for-profit and non-profits as we believe both can use the lessons in this book.
Another important concept that is woven throughout the book is that a business has an identity separate from its owners. One of your authors, The Our Shawn, is a lawyer. He reminds us that if a business is going to have its own legal existence under the law, it needs to be separated from the owners and other businesses.
If you remind yourself that your business is separate from the existence of you or any person or entity, it will be easier to grow your business and later step away from it. Think of a big business; one that is traded on a stock exchange or with lots of locations. We can guarantee that when it loses any one person, that business will continue to operate. It might change radically when it experiences a significant personnel change, but the business will continue.
Would it surprise you when we say that many businesses today are more like glorified jobs? Maybe even complicated jobs where multiple people need to work together. Here is the key difference between a glorified job and a business. Many businesses cannot exist without the owner (or some other key person). We call that a job pretending to be a business.
Now don’t get us wrong. You can make a lot of money without building a business. Many people do it all the time. But if something happens to you and you can’t work, there is generally nothing left to the business. Consider, for example, a web designer who has started a web design business. She has operated the business successfully for 10 years, marketing to local companies through her website and her networking connections. Now, she decides to move to another part of the country and start a new career with a graphic design firm. Without her, there is no web design business to sell, because she is the business.
Building a business is about making the organization have its own identity. It must be able to exist without depending on any one person or entity for its survival. Let’s revisit our web design business. If the owner had expanded her operations to include other web designers and had built a system by which everyone could produce in a consistent manner, the success of the business would not depend on her. Having operating systems in place is an important step in building a business that is independent from its owner.
Building a business is a lot like raising a child. The child depends on you and needs a lot of help to grow, learn and survive. Over time, the child starts doing more and more things on his own. And finally, the child has matured enough that he can do almost everything without you.
A real business is like a competent adult child. The business can stand on its own and do its own thing. But it also remembers where it came from, stays connected to its roots and takes care of its parents.
Join us on this business building journey where we move from Entrepreneur to CEO. We’ll be examining how to get from simply making money to building a sustainable business in the following chapters. Look for our upcoming book, Entrepreneur to CEO. This article is a small portion of the content of the book being co-authored by The Our Shawn McBride and Ann Gatty. If you want updates on the book including the possibility of joining our release team or getting one of the first copies please join our mailing list here.
Download Making Money and Building a Business are Different Things as a pdf.
About the Co-Author:
Shawn McBride, also known as The Our Shawn, works with successful, private business owners on ways to build companies to stand the test of time. He is all about empowering business owners, employees and others to live a life they love. He’ll work hard to make that happen for you and your audiences. The Our Shawn earned a J.D. from the University of Maryland School of Law and a CPA from Townson University. He is the host of the popular show, The Future Done Right. His experience in business, law and speaking means he can effectively deliver powerful results for you and your teams. Learn more about him at Planning Done Right.