You have set up a corporation, designed a stunning logo, and registered your trade name. You have opened a bank account in the name of your company, rented office space, and begun wooing clients. You’re a business owner, right?
Many people — perhaps even most — who consider themselves business owners don’t really own a business, they own a job. Even if you have set up many of the formal indicia of a “real” business, one key factor prevents your organization from being a business.
The organization depends entirely on you.
If you earn money only when you are physically working, you don’t own a business you own a job. If your employees are not able to make decisions without your input, you don’t own a business you own a job. If your business would fall apart if you were gone for a week (or if you fear that it would), you don’t own a business you own a job.
Transitioning from owning a job to owning a business can be a daunting task. You went into business so that you could control your own destiny.
A job creates income; a business creates wealth. A job depends on your knowledge and skills; a business depends on systems, practices, and procedures that can be replicated. When you have a job, your customers are loyal to you; if you own a business, you can sell or transfer your customer base when you retire.
How can you be sure that you own a business rather than a job? Make decisions for the long term rather than the short haul. Don’t cut corners. Create a brand that proclaims the ways in which your business differs from the competition. Live up to the high expectations your brand creates.
Develop written systems, practices, and procedures that allow you to replicate the key components of your business. Hire smart people who share your ideals. Treat them fairly. Allow them to innovate and improve your systems and practices. Delegate key responsibilities, and hold people accountable for their stewardship. Cultivate and nurture the next generation of company leaders by giving them increasingly more responsibility. Plan for your retirement or for a diminished leadership role in the company.
Develop a team of advisors to help you Avoid Hidden Hazards and Lurking Liabilities. Ensure that no one person (especially yourself) has the entire knowledge base for any critical aspect of the business. Protect your intangible assets with well-crafted restrictive covenants and other prudent practices.
What would happen if you were hit by a bus? If (after a suitable period of mourning) the company would continue on without you, you own a business. If not, you own a job.
I am, first of all, a husband and father. Rebecca and I have been married 23 years; we have four children ages 21, 19, 18, and 15. My family is my greatest joy in life. For 24 years, I have practiced business law in Arizona, the past eleven as the managing partner of Gibson Ferrin, PLC. We help businesses and their owners meet their business and personal goals. My practice focuses on the intersection between intellectual property law and employment law. I help businesses prosper by properly managing their intangible assets.
I am licensed to practice law in Arizona only. Though I believe the advice in BiziBoom™ is based on sound legal principles, the law of your jurisdiction may be different. The advice given on BiziBoom™ is informational only; it may not be applicable to your specific situation. You should seek the advice of competent counsel in your jurisdiction, someone who knows the particular legal requirements of your jurisdiction. Until you have signed an engagement letter with Gibson Ferrin, PLC, neither the Firm nor I are acting as your legal counsel. Nothing on BiziBoom™ creates an attorney/client relationship between you and the Firm.