Yesterday I wrote my first post in a new case study series I’m doing on my brand development process. I had some really great feedback to the series and it’s clear this is definitely of strong interest to a lot of readers. One of my readers, in fact the same one that inspired the case study series (Domain Fuze), asked a great question yesterday. This was such a good question, and one that I think many Domainers have so I thought I’d do a post about it! Here’s the question that was asked:
Following your blog, the thing that I’m most impressed with is your ability to juggle 37 projects at once, all outside of your day job. Domaining is also a 2nd job for me and I would love to hear any time management (hate that phrase) tips that allow you to be so effective. With the recent birth of our first, I see now that I USED to have all the time in the world. Now I’m scrambling to learn how to time juggle.
The question here extends beyond Domaining and applies to tons of other businesses both online and offline. I’ll start with how I scaled my business and then move-onto some recommendations that will apply to just about any business.
So here’s the magic question, “what is the difference between running a business and being self employed?”
Running a business means that if you go away for a month, when you come back the system is still running, money is being made and work is being done. This means you have developed a system for making money and found the right people to do the day-to-day work. Being self employed on the other hand means that if you go away for a month, so does your income. There’s nothing wrong with being self employed but it does mean that you probably spending more time working in your business than working on your business.
When you’re self employed starting a new project means taking on more work yourself, when you run a business starting a new project means putting-together the right team to get the job done. This is the point that I hit in 2009 after spending over a year being self employed in the domain investing space. Every time I wanted to embark on a new project this meant putting more work on my plate. It reached a point where I just couldn’t keep up with the work, I was the worst boss in the world, and being self employed, I was getting overloaded as an employee.
So I reached-out to a few family friends that run their own businesses to get some advice. All of the advice came-back the same, “well it sounds like you’ve created a job for yourself, now it’s time to build a business.” They said that since my business was making money there is nothing wrong with taking some percentage of that money, and using it to pay people who will do the work. As a business owner they stressed the importance of staying strategic and finding great people who your trust to do the tactical day-to-day roles.
I started-out by going onto oDesk and hiring an HTML/CSS/PHP Developer and a Graphic Artist. This meant that every time I had an idea for a new brand to build, I could reach-out to my two new team-members and give them the project. Of course this means managing a team which is another challenge onto itself but critical to do in order to really build a system. My first two hires turned-out to be, well, not so good, so I fired them and began looking for better replacements.
It was through this process that I learned about how to find great people, rather than just finding people who could get the job done. My interview process became more detailed, I spent more time talking to references and looking at past projects. Soon I had hired four people, two developers, a graphic artist, and a content writer. None of these people were full-time but instead were paid on a per-project basis. I found this worked much better than hourly when it comes to outsourced staff.
While I was giving away a percentage of my profits I was also shifting gears and going from being self employed to running a business. This was all solidified for me in August of 2009 when Daina and I took a month off and traveled the world. For an entire month I spent no more than 20 minutes a day on my business, and that time was spent just doing email and syncing-up with the team. In September I reviewed my balance sheet for August – I had just had my highest revenue month my business had ever seen.
Now my business is working on more projects than we ever have and seeing incredible traction and growth. When I buy a great domain for development I don’t think about how much time it’s going to take me to build the site, write the content, etc. Instead I think about any special instructions I should give my team, particular considerations they should make, etc. My time is spent analyzing the markets that we’re in, negotiating strategic partnerships, and making investments that continue to grow the business. I now have a total of eight people that work with me on a per-project basis and I’ll probably be bringing on 2-3 more people next year.
So how do you know when it’s time to shift from being self employed to being a business owner?
This is different for everyone but the rule of thumb that worked for me is when you hit the point that you could give-away 25% of what you’re making and still be happy. You only want to scale your business once you’ve found a system that works. If you aren’t generating very much income then you’ll want to stay in the self employed category until you find a system, a process that can be used to generate income. Once you’ve followed the process yourself and seen that it works, and see your revenue increasing, then start thinking about how someone other than you could do what you’re doing.
Whether you are running a domain investing company or a cement delivery business the idea is still the same. If you want to scale your business you can’t do it all yourself.
As you scale you’ll start to do more things that a CEO would do rather than an employee. I went from writing articles and HTML code to finding great people and determining how to best motivate them and keep them excited. I focused on building long-term relationships with advertising partners and other companies in the niche we were building in. My job went from a day-to-day role to a much higher-level strategic role looking at the business from 10,000 feet.
Now my last point here is the importance of timing. Not everyone reading this will be able to scale their business right-away. In many cases you might still be looking for that replicable system or process. Don’t get disappointed if you haven’t found it yet, this is the challenge of running a business and the reason why so many startups fail. Failure is good, you can learn from it. The key is continuing to pivot and iterate until you find a model that works. Once you find that model you can stop working in your business and start working on your business.