As an entrepreneur, being self-employed is the deadliest business trap ever!
Business, whether online [virtual] or offline [brick and mortar], small or big is governed by the same principles and calls for the same set of basic functions – production, marketing, finance, staffing and so on. Any difference that exists at all lies only in tactics.
Marketing is still about finding, keeping and growing profitable clients, whether your business is online or offline, big or small. The same goes for value creation [production], whether it is a product or service business you run, the reason for offering those products/services is the same -generating income by solving people’s problems.
Also, online or offline, big or small, every business needs workers [staffing] and the same principles and functions of leading them apply.
You see, in both business and in life, principles and functions rarely change, what changes is tactics. ‘The why’ [principle] and ‘the what’ [functions] are fundamentally the same, what differs is ‘the how‘ [tactics]. So, that you run an online or small business, is no excuse for not structuring and running your business on fundamental principles and functions that has been the bedrock of every successful business.
Having this consciousness is what makes successful business owners exceptional. They understand from the outset that being self-employed is limiting and from their small beginnings, they begin to lay the foundation for building a company that has the potential to grow and someday operate without them.
Are You DOING Business Or BUILDING A Business?
Doing business is the definition of being a self-employed entrepreneur [freelancer]. When everything about your business is dependent on you as the owner, you’re simply doing business. The keyword here is ‘dependency’. Being a self-employed entrepreneur means everything about your business revolves around you the owner.
When you don’t work, your business is down. Why? Because you are ‘working in’ [doing] your business rather than ‘working on’ [building] it. This is the danger of being a self-employed entrepreneur –you and your business is inseparable!
Building a business is the definition of being a Chief Executive Officer [CEO]. When everything about your business is NOT dependent on you as the owner, then you’re building a business. The keyword here is ‘independence’.
Being a CEO means you run your business as a company and everything about your business doesn’t revolve around you as the owner. When you don’t work, your business is still working. Why? Because you are ‘working on’ [building] your business rather than ‘working in’ [doing] it. This is the benefit of being a CEO –you and your business is separable!
Being self-employed [doing business] is the deadliest trap of business ever. That you are small is no excuse for wanting to be a one-man army. Someday soon, you will no longer be able to do all the things you so easily do now as a result of age, so what will become of your business then?
Someday soon, your small business will outgrow your capacity to meet all your customer’s increasing demand, so what will become of your business then?
Then, you’ll suddenly realize that all your ‘can-do-it-all-by-myself’ attitude as a self-employed entrepreneur is counterproductive. Then you will come to terms with the universal truth that one tree does not make up a forest and that one is too small a number to achieve greatness!
Successfully running a business is about profitably helping your clients achieve desired results consistently through the products/services you offer to them. It demands a high level of coordination and execution of several key activities. These activities cannot be handled successfully by only one person over a long period of time, so there’s need to create an operational structure/system for effectiveness and efficiency.
Creating this operational system/structure for your business is crucial to your success as a small business. At the head of this structure/system, is where you must operate from as the owner of your business. And the formal title given to anyone occupying this position is Chief Executive Officer [CEO].
Running a Business as a Company is the Essence of Being a CEO
Recently, I began to notice a general misconception among many small business owners especially the self-employed internet entrepreneurs that the CEO title is for the bureaucratic corporate organizations and not for those who want to ‘do their own thing’.
In fact, the other day I read the entrepreneurial journey of Ingrid Abboud of nittyGriddy and it really made me think deeply about why many online entrepreneurs shy away from the reality that someday their own thing will outgrow them.
While I can relate with the fact that most small businesses are started from the efforts of only one person at first, this is not enough reason to want to inhibit the growth potential of your business by still running it as a one man show. From the outset, it’s important to consciously go about your small business with the mindset as if it were already a big business.
Thomas Watson Jnr., once said about his father, Thomas Watson, the founder of IBM when the company was still a very small business, not even yet known within their locality. His father came home one day and suddenly announced the change of the business name from what it used to be to IBM [International Business Machines].
He said out of surprise he had to ask him why such an audacious global name for a business which was at that time only a one man show. His father replied him by saying that;
you start acting from small the way you’ll like to be when you eventually become big.
The CEO title as corporate or bureaucratic as it may seem, comes with its own unique responsibilities and functions. Business is a team sport and every team needs a coach in order to be effective and successful. The CEO is the coach of a business.
Being a business owner is about performing certain functions, these functions are governed by certain fundamental principles that cut across all kind of businesses, online or offline, big or small. Performing these functions is what being a CEO is all about.
The function supersedes the title or position. The title simply serves as an encapsulation of the fundamental functions and corresponding roles required of every business owner. This unusual article is about knowing what these fundamental functions are, their underlying principles, and their corresponding roles.
A Company is More VALUABLE than a Person [freelancer]
That you are currently operating as a self-employed entrepreneur [freelancer] is not enough reason to think or act small. Look for other smart people to bring on board as vision partners in your company. Share the vision of your business with them; they don’t have to be full-time employees for now till you can afford them.
Bring them in as freelancers or strategic partners to work together on specific projects and help build the company. But make sure they share the same values as you, because strategic partnership/alliance can only be formed on the foundation of trust powered by shared values.
Remember always, that you are not simply doing business [freelancer], but rather building a business [company]. Therefore, endeavour to seek out the right kind of vision partners that can fit into your core ideology and culture as a company.
Two Self-Employed Entrepreneurs Who Built a Company
- Brian Clark of Copyblogger
Built a truly SIGNIFICANT [unique and useful] company –Copyblogger Media LLC by strategically partnering with the likes of Tony Clark co-creator of Teaching Sells as Chief Operations Officer [COO], Sonia Simone of remarkable communication as Chief Marketing Officer [CMO], Sean Jackson the creator of Scribe SEO as Chief Financial officer [CFO], Brian Gardner founder of StudioPress as the product manager for their Genesis Framework and turnkey themes for WordPress and Brian Clark himself occupying the CEO position.
With these 5 member team, Copyblogger Media LLC is growing into one of the most successful social media company in the world today coming up with innovative products such as; Premise, Authority Rules, and Third Tribe.
is also doing the same thing, that’s how he created the Human Business Works [HBW] company by strategically partnering with Rob Hatch as COO, Liz Stewart founder Lush Beads as project manager, Josh Fisher as the creative director, Merlene Paynter as director of content, Anne Bryant as the executive assistant and Chris Brogan himself occupying the CEO position.
With these 5 member team, the Human Business Works [HBW] company has successfully launched innovative products/services such as; 501 Mission Place –a nonprofit, Kitchen Table Companies, and Blog Topics.
Size has NOTHING to do with Running a Business as a Company!
On May 1st 2006, in my sitting room, I and my mentor and friend Tolulope Oyebola, [he taught me most of the things I know about I.T. –Information Technology] decided to go into business after we both resigned from working as computer and network administrators for a cybercafé. We co-started NEWCHILD, an I.T. support company.
Prior to this day, Tolulope had been doing business as a freelancer alone on part time even as an employee with the same business name [Newchild]. But on this particular day, he decided it was time to build a real business, so that’s when I came on board –to help in the building of a real business [company].
From the outset, we assumed different roles in the business based on our individual strengths and weaknesses as individuals. As the founder and being a core technical person, he took up the CEO [Chief Executive Officer] position in order to technically [value creation] drive the business. I, being a core conceptual person, took up the COO [Chief Operations Officer] position in order to strategically [business development] drive the business.
While he ensured the business consistently had the technical competence to solve customers’ problems being an I.T. company. I ensured the business had the capacity to consistently function as a real business by putting the necessary operational structure/system in place. And so together, we began the building of Newchild Information Technologies, as a real business [company].
My first task was to turn Newchild from just an ordinary business [legal entity] into a company [living entity] and to do that required branding. At the time, they were several computer repairs and networking freelancers all operating as self-employed entrepreneurs, rather than as a real business [company]. So, I began the branding strategy by positioning the company as ‘The Professional I.T. Support Consultants”.
The owned word in this positioning statement is ‘Professional’. We wanted to differentiate ourselves by deliberately creating a dichotomy [class difference] in the market. What was this dichotomy? We wanted the market to know that there existed two classes, types or kinds of I.T. support consultants; ‘professionals’ and ‘unprofessionals’.
To communicate our professionalism, I listed out all our services/solutions such as computer repairs/maintenance, networking, web design, training, internet access etc., and branded [renamed] them. Rather than use their general names, I came up with creative names for each.
- Pre-Ups™ which is short for ‘preventive updates’ is the brand name for our computer repairs/maintenance services;
- Shareworks™ is the brand name for our networking services/solutions;
- Serverplus™ is the brand name for our internet bandwidth management solutions;
- Webcom™ [web development/design services and solutions];
- Netlinks™ [internet access solutions],
- Proficient™ [I.T. training services] etc.
My second task was the creation of a corporate identity for the company. These included the creation of a corporate website, complementary cards for the both of us, a company profile that described the company in a compelling manner; service brochure that explained in details each of our services and solutions; different sales documents such as service request forms, customer information form, customer satisfaction survey forms, all these further helped in establishing our professionalism as a company. We couldn’t possibly be a professional company without having a formal/corporate image.
In the profile, I included the responses we gathered from surveying our existing customers as testimonials; we partnered with a few other freelancers with core competencies in different aspects of I.T. and asked for permission to include their names as part of our team of professionals in return for more freelance jobs from us –they agreed.
What was the outcome of all these unusual efforts? Within six months, we were able to work for the Nigerian Air Force [logistic command, Ikeja], Lagos State Library Board and a few other small businesses. Today, the company comprises of 7 team members including Tolulope and I who still happen to be the only two core employees of the company out of the 7 of us.
So far, we’ve successfully taken over the management of a once defunct cybercafé and been managing it now for 3 years with about 1700 registered customers; we develop most of the unusual websites in Nigeria; if you doubt my claim, click on this link to view our portfolio.
Tolulope Oyebola, is one of the smartest CEOs I’ve ever come across. He recognizes his weaknesses and doesn’t in anyway try to hide it. Rather, he seeks out other smart team mates to compensate for his weaknesses. This is how together; we’ve been vision partners since 2003 after he taught me computer repairs and networking as his student.
In fact, Newchild Information Technologies is my very first project as a business development consultant. Tolulope gave me all the freedom I needed to test out all my innovative ideas and strategies.
What Makes an Exceptional CEO?
I have written some detailed articles about the essential roles of every successful CEO in a series before. Although, I am still working on completing the series, below are the ones I have been able to complete so far and I seriously recommend you read them.
When the whole series is completed, I will be making them available as a Free report [ebook]. I will only be giving out this ebook when completed to naijapreneur! subscribers. So if you aren’t yet a subscriber, enter your name and email address in the box below this article to subscribe now!
Over to you
Are you doing business or building a business?
How are you acting big even as a self-employed entrepreneur [freelancer]?
Do you think the title of a CEO is too ‘formal’, ‘bureaucratic’ or ‘not cool’ for self-employed entrepreneurs?
What are the challenges you currently face being a self-employed entrepreneur?
I would really love to hear from you, so feel free to share your thoughts with the community below.