I was having lunch with my friend Steve Owsinski of Igadea today. We were talking about networking and he mentioned that a lot of their clients were also friends. In fact, the clients are more likely to say “Let’s talk with Steve about our Web site” rather than “Let’s go to Igadea”. I’ve been thinking about that dynamic ever since and to tell the truth, while I’m pretty sure that’s a desirable thing, I can also see some downsides. I would love to hear your perspective.
On the good side: Obviously, if your clients are coming to you, then you have effectively established yourself as an expert in their minds. They see you as trustworthy and as the only one they want to talk to. They also will tend to be great ambassadors for you. They will be telling all their friends that they need to talk with “Steve” because he is the expert. Especially for those of us who are one-person shops, this is a goal to shoot for. We want people to come to us. Also, if you are someone else’s employee, then this makes you very hard to fire. Again, not a bad situation to be in.
On the less good side: If you have the dream of growing your business beyond yourself someday, then you need to find a way of transferring your personal reputation into the company. You want people thinking that “ABC, Inc” (the company you built) are the people to talk with, because they are the experts. If you are perceived as the only expert at ABC, then as soon as you retire to enjoy the fruits of creating the business, the business will begin to fail, because the “expert” isn’t there anymore. Even if you don’t intend to sell your business, if the perception is that you are the only one who can get the job done, it may be difficult to get your clients to accept your employees, even if you trained them yourself, as anything other than second-best.
Maybe I’m just creating a tempest in a teapot here. Has anyone had experience with growing their business beyond themselves or having challenges doing so because of the perception that they are the brains behind the business?
I think you got it right Greg – if you want to grow beyond "being the business" to being a business owner, you have to do a few things along the way. I was involved in growing a <$500k/year consulting practice, where the founder did all the sales and 90% of the delivery, into a $6M/year consulting business where the founder was barely involved.
Here are a few things we had to do to make the transition that come to mind:
– Gave staff a role in client facing activities so they could begin developing relationships with customers
– Create a career path for the staff to move from doing project work to managing project delivery to managing client relationships, and finally, to creating their own client relationships
– Upgraded pay and benefits to keep people beyond the "2 years and out" habit that we had developed
– Operationalized everything in the business we could, including capturing the thought leadership the founder had in his head so that others could "sing from the same songbook"
We hit a wall at around $2M/year. The founder had grown comfortable delegating project management and business management functions, but was still taking the lead role in all client delivery. It was only when he had a life-threatening accident and was forced to let others take the lead with clients for a period of time that he saw that he could trust the staff to handle all aspects of the business.
Wow, Mike! Thank you so much for your response. I've heard similar stories from accountant and lawyer firms. The founders often have a hard time giving up their clients. It's almost as if they see them as a validation of the value they bring the company.
Thanks again!
I think you have that analysis right for the company that doesn't want to grow, too. If you are a one-person shop, like we are for Cecilia's Pastries, then having the person identified with the company can be a big selling point. For Cecilia, her authenticity as a French-born, French-trained pastry chef is a big selling point. When people buy pastries from her, they know they are getting the "real deal".
Thanks for your comment, Dan!
Yeah, I guess the real point would be that you should know what the ultimate goals for your business are. If you plan on creating a legacy beyond yourself, then you need to work harder on the business's reputation. If the product or service is dependent on who you are, then you need to build yourself over the business.