There are many accounting tasks to complete for 2018 to prepare for the upcoming tax deadlines. In this post, however, I’ll address how to improve your business’s financial performance for 2019.
I’m a fan of Mike Michalowicz. He’s the founder of Profit First, a financial management methodology (and a book) that has changed how many ecommerce merchants manage their business. As companies grow, entrepreneurs often find that their most valuable resource is time. It’s the one commodity they cannot buy.
Michalowicz latest book, “Clockwork: Design Your Business to Run Itself,” was released in August. The book addresses businesses that are starting to scale and the founders that are a bottleneck to that growth. There are two concepts in the book that every entrepreneur should adopt: Determine your “queen bee role” and take a four-week vacation.
Identifying your QBR can change your life and your business. The concept is taken from the activity of the queen bee in a beehive. Her role of laying eggs is so important that the other bees will do whatever it takes to support her. If the queen is over-heated, the other bees will switch from, say, collecting pollen to fanning and cooling her.
Michalowicz argues that entrepreneurs must discover their QBR. What functions are you doing that interfere with vital tasks that would result in the biggest financial return of your business? How can you free up time to focus on your QBR?
In “Clockwork,” Michalowicz addresses the 4Ds: doing, deciding, delegating, and designing. The 4Ds represent the way work is done in most organizations. As small businesses owners, we spend much of our time doing or deciding. Either we do the tasks ourselves or we ask someone to help us while, importantly, checking in for vital decisions.
Often, doers will hand off a task only to be interrupted frequently with questions because they didn’t truly delegate — they required a check-in around decisions. This scenario results in frustration for both parties, ending with the doer exclaiming, “I will do it myself!”
If doers delegated a task by letting go of the deciding, the result would be more time to focus on their QBR. Finally, as the roles become clearer and are functioning smoothly, entrepreneurs can spend time designing — working on the business rather than in it.
And when you can focus on creating the business, it’s time to plan that four-week vacation.
Why 4 Weeks?
The four-week vacation is an exercise that helps an organization prepare for the day when the owner is no longer active. The owner monitors performance but focuses on future opportunities.
Preparing for a four-week vacation requires 12 to 18 months, typically. I took a four-week vacation from my accounting practice last July. I prepared my team for 17 months. The first step was setting the QBR for the business and then for myself.
To focus on this task, I delegated duties to other team members over those 17 months. I took test vacations for a week, then two weeks, where I was entirely disconnected from the team. It went smoothly with no problems. The team members grew in confidence, and I became clearer about the business’s direction.
Take time to consider your business’s plans for 2019. If you plan to grow, the solution is not just additional capital, for example. It’s more complicated than that. Clarify your queen bee role first. Then plan your capital needs and profitability.