What makes owning a business different from being self-employed?
I do not believe that one is better than the other. Both have their pros and their cons. I am suggesting that if you wish to have a business that pays you, it is usually more efficient if it has corporate systems with a corporate mentality towards those systems.
1. Personal or Market Driven
A personally driven business is one that is designed (specifically sets its pricing and operations) based on the business owner's personal needs, personal expenses, and is subject to personal effects on the business performance. Most self-employed people run their businesses in this manner. A market driven business focuses on the value the business brings to customers (again, think pricing and operational capabilities), the synergies between strategic vendors and others who create value and serve, and the business is not limited by the personal needs and abilities of the business owner.
2. Reliance on systems
Many self-employed operations are distinguished by the "chief cook and bottle washer" approach. The entrepreneur becomes the person who is controlling and potentially doing everything. There are few or no written systems developed. There are no financial systems, no operational systems, no communications systems, and / or no product development systems. If the business owner were to take a vacation, becoming seriously ill or die, then the business would come to a halt almost immediately. The owner is involved in the business so deeply that no one else knows how to perform the tasks.
A business has multiple systems developed and in place. The owner is not responsible for performing the tasks of the business, but instead is responsible for the creation and the output of the different systems in the business. He or she may have been instrumental in developing them or instructing others to develop them, but the systems are created and put in place so that anyone can be trained to perform them.
A system does not have to be a complicated, earth-shaking concept. A system is a known result or outcome, with generally three or four steps to get that that desired result. Those three or four steps are written and can be taught to somebody else. The business owner does not need to be there for it to happen. That is all a system is. It is as simple as that.
This is a difficult task for many small business owners. The function of delegation is to ensure that the business owner is focused on what he or she does best and to hire others and delegate tasks to others who have the talent and ability to perform them exceptionally well. Multimillion-dollar businesses understand the importance of delegating tasks and projects .. Of course, for delegation to work, it is vital that there are functional systems in place.
Delegating does not need to be something that is fraught with issues or is it difficult to understand how to do it correctly. Delegating tasks that are outside your Unique Ability® can lead you down the path to success. Developing systems and understanding what, why, and how to delegate effectively will be important to your success.
Being self-employed can be wonderful, if that is what you want. However, if you aspire to own a multimillion-dollar business or a business that works even when you are spending your time doing something else, then consider the three differences presented.