04.
Reframing Ownership — The Wealth Generator

Business as Asset That Shouldn’t Require You to Do the Work

If you're reading this it's because you're looking for ways to improve the health of your small business. You have the power to change its course but you're concerned about heading in the wrong direction — after all, you have to look your staff in the eyes every day. You feel the walls closing in — the combination of cheaper competitors springing up from nowhere and your staff complain about the rising cost of living makes you wonder if you have a future. By facing reality — what you own is different from what you do — and deciding your operating values you can normalize making profit. By giving your people more exposure to the economics of your business you control the narrative many owners fear — that their employees feel taken advantage of. No healthy business ignores the need to sell their offering for more than they pay to produce it, and your employees need to hear from you that you're all here to make profit. No profit: no jobs.

Even if you do subsadize your business, hoping a downturn can be righted, you diminish your chances by degrading your service:

Healthy margins give us the wherewithal to fix mistakes, earn trust and build loyalty with our clients. In this way, our most profitable clients get our best service. It does not happen the other way around. Superior service does not improve profit; profit improves service.

The Win Without Pitching Manifesto

Profit does magical things to a business but the absence of profit is not a lack of magic. It's the reduction of your chances — a lengthening of your odds — that there will be a future to enjoy. It is an existential threat to not be at least treading water with inflation. Which heightens the need for one of all small businesses' operating values to center profit in the conversation. You cannot do that without normalizing your business model with the people who enable it. What does that look like in practice?

• Project Managers manage projects. Including the consumption of their resources. They monitor, report, and make decisions about the economics of their projects. They own the responsibility for every project being profitable.
• Owners take the risk of staking the business. Your team understands that there's potential up- and down-side to ownership. They don't need to know the gory details — they do not need a days-to-starvation number — but they should understand the risk the ownership group takes and be unsurprised that profit increases the owner's equity in the business.

When your team understands the simple mechanics of your operation, many fringe benefits compound to reduce the load on your shoulders, chiefly the shift from "I am the business" to "I own a wealth-generating machine." Success should look like a clean separation of roles and a team that has access to the levers they need to do a good job. This is a new thought for many small business owners because they surround themselves with other owners, who distrust their staff, feeling the need to smother every decision with their approval. By prioritizing the mid- and long-term improvement of team standards you can alleviate the pressure on what you do and finally enjoy what you own. After all, you've taken the risk.