Mr. Smith, they want to meet with you in HR? The dread of those words and the long walk of disappointment that follows is something we wouldn’t wish on anyone. No one likes being fired. That’s unless your calling is to be your own boss. Then being fired is a relief because now you know you didn’t belong there in the first place. Jumping out onto your own is daring, brave, fun and the first stepping-stone to accomplishing your life goals. However, there is one crucial thing that’s left behind when you go out on your own. It’s something that keeps many productive—accountability.
When you work for someone there’s accountability everywhere. Your team is counting on you to pull your share. Your boss is counting on you to help grow the business. You’re holding yourself accountable because you want a raise. Based on those factors you buckle down, get the work done and produce results so you don’t get fired.
When you work for yourself, especially in the early years, you’re wearing all the hats and there’s no one holding you accountable. The danger is that since no one’s holding you accountable for producing results, making more money and growing the business at a reasonable rate you don’t. You’ll spend hours and years working yourself to the bone until you’re confused as to why you’re not living in a deluxe apartment in the sky eating bon bons. Ultimately, you’re going to get fed up, quit your business and go back to working for someone else. There are a few things you can do to hold yourself accountable for doing your job on a consistent basis.
The Foundation of Accountability: Understanding your real job
This is the most important thing for you to realize when you go out on your own. When you have your own business your job no longer is doing the work. Your primary job is to grow the business. Period. Michael Gerber of E-Myth talks about the difference between working on your business and working in your business. When you work for someone else you’re working in the business. You’re doing the tasks that keep the doors open. When you work on the business, you’re not doing task that keep the doors open, but the tasks that allow you to buy bigger doors. Put another way, a carpenter working for a construction company is working in someone’s business while his boss is out there working on the business getting new jobs. Both are important, but if the boss doesn’t bring in new business then no one has a job. That’s your role. Bring in new work for someone else to do while you’re working on bigger and better things that will keep your business running for years to come. If you love doing the work, then do it for someone else that will pay you what you want. Naturally, when you start you’re going to be working in and on the business, but if you’re holding yourself accountable then majority of your tasks will be focused on your business. If you do the next task then this will be easier.
Beginning Accountability: Create position contracts
Gerber talks about this at length in his book, E-Myth Revisited. We’ve all read position details for jobs we’re interested in. What you’re doing is creating the same ones for your business. Sit down and outline all the positions needed to run and grow your business. Next write up a position contract just like the one you signed when you were working in a company. Be sure to include the following:
• Position overview
• Responsibilities
• Goals to reach
• Evaluation standards (very crucial)
If you’re not sure what to write, just copy and paste it from a posting from another company for the same position. Do this for every position needed to run your company. At the bottom sign your name and date it. If you’re just starting out, naturally, you’re going to be signing all the roles. The point is to understand what’s needed to grow your company until you can hire someone to fill it.
Creating position contracts is crucial at the start because it provides focus for you. So many jump into business and quickly realize they’re in over their heads because they don’t know how to do the things others did when they were a part of a company. Those roles are yours now and if you don’t step up to the plate then you could fail fast. Now I’ll be honest here and say I didn’t do this when I first started. I didn’t even do it when I first heard Gerber talk about it in E-Myth Revisited. When did I do it? When I got to the Annual Accountability section and got my wake up call that I’ll discuss in a bit. For now, let’s focus on keeping you accountable on a daily basis. This one’s absolutely critical for me.
So many jump into business and quickly realize they’re in over their heads because they don’t know how to do the things others did when they were a part of a company. But now those roles are yours and if you don’t step up to the plate then you could fail fast.
Daily Accountability: Create tasks lists
If you don’t know the goals you have to accomplish for the day then you could be sitting in your office wasting time on social media or watching YouTube videos. When creating a task list you want to put these in two categories so you can better understand and refine the roles of each position in your company. Those categories are “tasks in your business” and “tasks on your business”. You need to do this to understand what tasks really grow your business so you can focus on those and rapidly increase your revenue. Completing a job from a closed sale is working in your business. Sending multiple quotes is working on your business. Which problem do you want to have? Finish a job and hope another comes in soon or have several jobs lined up for the next 6 months? Now you realize how much time you have to spend prospecting and selling so you can line up multiple jobs that will grow your business.
You want to create your task list for the week rather than the morning of. This way you’ll see what needs to be done for the week and then assign the tasks for specific days. I have a vast movie and music collection so if I don’t do this for the entire week then that time is going to be filled with mundane things. When I audit myself at the end of the week I’m cursing at how much time I wasted. I encourage you to do the same, make your weekly task list and audit it at the end of the week so you can see what you got done and didn’t do. If you’re tracking your numbers as well you’ll begin to see a correlation between the time spent of various tasks and your monthly revenue, which leads me to the next level of accountability.
Monthly Accountability: Give yourself sales quotas
It doesn’t matter if you’re good at it or not, if you have a business you’re in sales. You may hate salesmen. You may dread the idea of getting in front of someone and being vulnerable like salesmen are. However, when you decided to go out on your own you also decided to become a salesman. Accept it, embrace and get better at it.
Now you need to set sales quotas to reach. Doing this is actually easy. What do you want to make a year? If your previous job covered your living expenses then start there. How much do you make from your average job? Divide that by your annual revenue goal and now you know how much new business you have to bring in each month. There is one crucial difference that you need to factor in when you’re setting your annual revenue goals. Your paycheck was net income. The taxes and deductions were taken from your gross pay and you lived off the net. Those deductions are now replaced with materials and operation costs. How much money is required to run your business? Take that number and triple it to start. This allows you to cover unexpected expenses and build up a runway of business savings you can use if work dries up for a period of time. As you do this then you’ll be able to review how you did for the month.
Quarterly Accountability: Review yourself as if you were an employee
When you worked for someone else you probably had semi-annual or annual reviews. As a business owner you don’t have the luxury of letting so much time go by without making the changes that come from performance reviews. If you created the position contracts then you can look at how the business has been going over the past three months and see how you stack up. This is where the title of this article comes to fruition. This is what started change for me in my business. In the position contract I created for the role of CEO one of the responsibilities was, “Company growth service expansion and profit maximization”. Naturally the evaluation standards for that are reaching revenue quotas. When I didn’t hit my quotas after the first quarter, I made some adjustments. When I didn’t reach the quotas after the next quarter I made cutbacks. When I didn’t after the third quarter I had to ask myself the hard question. These weren’t off by a little, but by a large enough amount that made it difficult to provide for my family. Now, if this was at a company I was working in what would happen to me? If I were the one conducting the review what would I do to myself? I had to be honest and realize I would fire myself. Realizing that made me make some drastic changes that helped me accelerate my revenue and actually exceed my goals. Doing these accountability tasks is important but one of the most important is the last task.
Annual Accountability: Track your time
By tracking your time you can find efficient ways of accomplishing tasks. Tracking your time before bringing someone in to handle that role allows you to audit him or her to ensure they’re not wasting your money. It also allows you to train them properly setting them up for success. Another benefit that comes from tracking your time is that it allows you to price your products and services properly. I preface this by saying as the owner your time is immutable. You’re expected to spend the most time out of anyone in your business so you can’t create pricing based off of that. However, if you know how long it takes to complete a job at its various stages then you can create pricing based on the salary you’d pay someone to complete it multiplying that by a factor of at least three. The app I use to track my time is Toggl. Most of the functions you need from it are free and you can log in online or through the mobile app. I delineate my tasks in Toggl by both client and the task itself. Then I can audit the clients and my team to see how much time is being spent and the various tasks they’re being spent on. This is where knowing how much time it takes to complete a job at an entry or mid-experience level comes into play. If someone on the team is taking too long to complete a job, I can see where the time is being spent and provide further training to help him or her be more efficient. If they’re not tracking their time then I can proceed accordingly as well.
By tracking my time I got my first wake up call prompting everything I discussed in this article. Through Toggl I produced a report of all the time spent during the year, broken down by client and tasks. Then I divided the total number of hours by my revenue that year. When I did it I was floored! I made $12 an hour. I hadn’t gotten paid that since high school. I realized that if I don’t make a dramatic change soon then I might as well get a job working for someone else. At least then I’d get paid my experience level. Since then I’ve made many changes and ensured that my revenue was at least the hourly rate I’d be paid for my experience level working for someone else. It’s grown yearly, as it should.
No one will hold you accountable for doing your job until it affects him or her. By that time, there are no nice words and serious consequences will be felt. You can avoid such tragedy by taking your role serious and holding yourself accountable for doing what you’re suppose to do—grow your business.
