Today, I will be playing the roles of both Good Cop and Bad Cop. So while you will most likely hate me a little bit for the first half of this, there will be cookies and pie in the second half. So read aaaalllll the way to the end. OK?
Let’s suppose, for a moment, that you are building a business and you introduce yourself like so:
“Hi! I’m Katerina Coachiness. I teach people how to get more confidence. I just opened my business last week. My company is going to be HUGE. I did my own website and work from my sofa and am going to develop courses and grow my list and I’m going to break all the rules and do it faster than anyone else ever has because I AM SPECIAL! And SMART! And all those people who say it’s really hard and takes a lot of time must just be lazy.”
Good for you, Katerina! You *might* have a business [but probably not]. And you definitely don’t have a company.
“Well that was snotty. Of course I have a business. I bought a license and everything. Did I tell you about my website?”
Did you make money last month?
“……………………………………. a little. I’m working on building my client base. But people are REALLY interested. Everyone I tell says that this is REALLY perfect for me.”
Did you make enough to pay all your bills, save for taxes, and have some leftover to reinvest?
Did any of those supportive people you run into at Starbucks and the grocery store actually give you money for what you offer?
Then you don’t have a business either.
There it is.
In black and white.
No money. No business. Full stop.
All the positive affirmations in the world do not change the simple fact that if you don’t make some cash, you are not a business. You might be starting a business, but you don’t have one yet.
Your website does not make a business. Your logo does not make a business. Your readers do not make a business.
And your state of mind definitely does not make a business.
Money makes a business. Plain and simple. Without money, you do not have a business.
And if you are the only driving force, planted firmly at the center, you most definitely do not have a company.
But wanna know the real kick-in-the-pants part?
There is absolutely not one thing wrong with that.
That is, unless there is.
So go with me for a minute. A minute in which we will assume you all have profitable businesses. [Stay with me… this is when the cookies and pie are served.] And this is we here I go all MBA on you and shit.
It all comes down to one simple and obnoxiously jargain-y question:
What’s your exit strategy?
This is not a question most solopreneurs ever consider.
And it’s actually a collection of questions:
What happens to your business if something happens to you?
What happens if you just don’t want to do it anymore?
Is it sellable?
Do you want it to live on after you retire?
And those questions actually go deeper:
What sits at the center of your business, is it you?
Does your business entirely depend on YOUR brainpower and sweat?
Or are you working to collaborate and incorporate the genius of others?
Do you invent methodologies or do you observe and report?
What does your business depend on to survive?
What would happen if the Internet went away?
Why all this matters:
Because right now, there are hundreds of thousands, maybe millions of solopreneurs out there. Many of whom have built jobs for themselves. Not businesses, not companies. Jobs.
And there is absolutely nothing wrong with building a job for yourself [helloooooo, my cat is the best boss EVER!].
A job is dependent on one thing for income. Traditionally, that’s the company you work for. For those I’m talking about, that one thing is the Internet. Without it, their business dies. Job-holding solopreneurs often have a singular approach. They focus on what they’re good at, and let others do the stuff they don’t want to focus on. This is why the IRS calls it self-employment. Not business ownership.
A business is a bit more diverse. It’s similar to a job, only more profitable, and seeks to innovate in some way. Someone who owns a business takes responsibility for all facets of its growth. Service, delivery, innovation, tech, marketing, everything. A business owner knows how to do everything in their business because at one point or another, they had to.
A company is a horse of an entirely different color. A company might focus on a multitude of things. It is a collaborative and often compartmentalized environment. A company owner knows that it takes capital to build things, and chooses a divers set of ways to approach its customer. A company plays a much longer game, and aspires to become an asset unto itself – meaning it can be sold for more than just its raw materials. A company is not dependent on any one person, but rather is dependent on one singular ideal or aspiration.
So which one are you, and which should you be?
Self-Employment is for those who:
– Have a message, a story to tell as the center of their work.
– Are solo and/or service based.
– Want to pursue public speaking or writing or designing (or plumbing, for that matter) as their primary, singular function.
A self-employed person’s only exit strategy is to simply stop doing what they are doing. Their work may live on, but there is not a business to sell, and no real assets to liquidate. They ARE the income stream generator.
A Business is for those who:
– Aspire to create a diverse set of offerings [beyond five different eCourses about roughly the same thing – by diverse, I mean like a product line… and a service… and maybe an app or something].
– Like the idea of creating something that continues to move and function and make money even when they go on vacation [and no, I do not mean affiliate income on a niche site].
– Feel good about hiring people to take over important parts of the process. Not just an assistant, but someone who can do integral work that adds sellable value.
– Want to be scalable [and growth is possible].
A business has many options for growth and exit. It can be sold as a whole, or possible parts of it can be sold off separately. It can grow into being a company, or can merge with a complimentary business. Or, it can be owned by you and operated by others. A business is something you can step in or out of. It may exist because of you, but you are not always the fuel that keeps it running.
A Company is for those who:
– Have an invention or product that taps a broad market or solves a specific problem for one industry.
– Are seeking investment capital because there would be no other way to get off the ground.
– Are prepared to lose money for a few years.
– Want a legacy. Something to exist long after they are gone.
– Want to employ people.
A company has the most options for exit. It can go public. It can grow exponentially. It can be bought or sold. It can merge. It is not dependent on any one person to thrive.
So why is it important to decide which you want to be?
Because each comes with its own unique path. The barriers to entry are different for all three and the rewards and pitfalls of each are specific and varied and are highly dependent on your personal and professional priorities.
My very own case study:
Makeness Media began as self-employment for me –with my eye on company status, long term. Though I am very close to business status, I am still the critical component in my business. Without me, and my small [mostly sub-contractor staff], Makeness is no more. But this is rapidly changing. My goal for the next year is to develop Makeness into business status by integrating more people, more systems, and more products into the fabric of how Makeness makes money and serves my community.
This is part of the reason I started Makeness with a business name, rather than my own name. My personal lifestyle, needs, and limitations told me that long-term, I will need to be able to pull back. Part of why I started Makeness was because I was physically not up for business trips, and suits and meetings with overseas clients at 3am anymore. I didn’t need a job. I needed a business. And at some point I will need my business to become a company.
But beyond my limitations, my goals and personality type also fed this decision. I like risk. I relish in it. Thrive in it. Am very comfortable all wrapped up in it [Snuggie-style] – to me, risk feels like a warm hug on a bridge from a bungee-jumper. And I have a mad-passion for creating something that feeds the livelihoods of others. My best work in the world has always been about fostering the dreams of as many people as I can. Ushering them. Teaching them. Promoting them. It is my Deepest Path and is the prayer I offer to the world as gratitude for my existence. I aspire to leave the world better than I found it by helping others do the same.
So simply put, I am not best-served be self-employment, nor are my people [both those inside my personal life and those who pay me for my work] because it is not, inherently sustainable.
To this end, Makeness Media is growing. I am adding a second coach and a second designer this month and am actively cultivating the slow process of extracting myself from so much day-to-day hands-on work.
What this means to my clients:
It means that you will soon benefit from the insight and brilliance of more heads than just mine. And it means that you will have more resources available to you from one source as you grow into whatever structure most works for you.
Which brings me to the core of this choice…
Once you decide what structure you are pointed towards, it becomes much, much easier to make decisions along the way accordingly, and serve your people in the most aligned, efficient, and decisive way possible.
Because I have chosen to push myself towards Business and Company status, I can make decisions that affect the future of my work much easier, much faster, and with less anxiety.
For example: I know that public speaking is not the thing for me right now – it might be later, but right now, I need to focus on content and product development, and growing my community through useful, hands-off offerings. For my self-employment to become my business, it needs less of me in the center, not more. That means more collaboration [like how I solicited the input of 20+ other designers and developers for the recent guide to hiring a web designer that MM released – rather than just writing the whole thing from my brain]. The key to business status is leadership. And true leadership only happens when you surround yourself with people who are smarter than you and you let them make your work better.
Role play is now over. Now go forth and play your own role.
And enjoy the cookies.