I grew up in a family where my Dad was self employed (Psychologist) and my Mom worked for a company (Nurse). We definitely were not rich by any means but we had what we needed and lived comfortably. My Dad was particularly interested in my financial education so would try to teach me as much as I could before I left the nest.
One of the big topics we covered was the difference between being self-employed and running a business. The concept made sense to me right-away, it really was a different approach to the same wonderful ideas running through all of our heads. Someone who is self-employed thinks of a new idea or a new way to make money, and gets in there and does it themselves. They can scale, but only to a point since there are only so many hours in the day, and just one person to do it!
A business owner thinks of a new idea or a new way to make money, and puts together a plan, forecasts how much he can make, and then hires people to get it done. He/She thinks about things like profit margin, cost of training, etc. when thinking of new ideas. The idea is, the business owner can do something that would take many people to do…because they are actually having many people do the work, not because they are trying to do the work of many people.
Derek Sivers (founder of CD Baby) has a great blog post about this exact topic, in it he says,
“Most self-employed people get caught in the delegation trap.
You’re so busy, doing everything yourself. You know you need help, but to find and train someone would take more time than you have! So you keep working harder, until you break.” (http://sivers.org/delegate)
I know a lot of people in this situation, some love it, others hate it, it really depends on the person and the job. My Dad for example, was very happy being self-employed, while he didn’t make money if he wasn’t working, he loves his job and really does it to make a difference, not a become a millionaire. I have a friend who built a business that now does over a few hundred thousand dollars a year, he’s been loving it but is always completely overloaded and is ready to start hiring people to take-over specific tasks.
At the core of running is business is that if you have a real business model running, you should be able to pull yourself out of the company, come back a year later, and it is making more money than when you left. Derek also talks about this and says,
“To be a true business owner, make sure you could leave for a year, and when you came back, your business would be doing better than when you left.” (http://sivers.org/delegate)
The first time something like this happened to me was in August of 2009 when Daina and I were on a month-long vacation and Europe and Mexico. I did almost no work, that’s right I actually unplugged and had a real vacation! I didn’t even look at any totals until September, and when I looked I found that my sites had made more money than they had ever made in a single month. I was gone for a month, and I made more money, that was cool!
Now in my business I see myself coming-up with new ideas all the time, after running the numbers some of them make sense, others don’t. I spend much more time at the strategic level planning than I do working within my business. This month I hired two new writers and a new Director of Marketing for one of our top brands. This means that I have been a bit more tactical this month as training take time, but it’s absolutely worth it to build a business that will continue to run, whether I’m doing the day-to-day, or not.
I get emails from a lot of Domainers telling me how they are completely maxed-out, yet I know plenty of others who are not, yet get far more done. Look at people like Frank Schilling and you’ll see someone who has built an incredible business. Frank has some of the most brilliant people on the planet working for him, as do people like Michael Berkens and many more. This is the model that I love, it hasn’t been easy, and I am definitely not in the same league as Frank or Mike but I’m building a profitable business and it is growing every year. If I didn’t do this I would never be able to run a software company like Appraiso while also working in my own business, there just wouldn’t be enough hours in the day!
So if you’re feeling overloaded and are finding yourself burning the candle at both ends, it might be time to delegate. If you aren’t doing Domaining as a full-time job you might have even more freedom to work with a lower profit margin while you’re still building the business. Derek has a great quote at the end of his post that I thought I’d end this article with – definitely something to strive for!
While I was away, my company grew from $1M to $20M in four years.
There’s a big difference between being self-employed and being a business owner.
Being self-employed feels like freedom until you realize that if you take time off, your business crumbles.
One final but important note: I would like to personally thank Braden Pollock who has been one of my main mentors over the last couple of years. Braden has built an absolutely amazing business and taught me a ton, and I can tell you I still have a LOT more to learn 🙂