Before you can decide how you're going to structure your business, you need to ascertain where you want to go in your business. Your business structure is the foundation of your entire business, and the decisions you make in its earliest days (and throughout) guide its future and longevity.
In this week’s episode of our Bite-Size Business live podcast, we talked about business structures and what’s right for you.
It's YOUR business, choose the structure that fits your goals!
What do you want to do with your business, and what structure do you want for it? Are you an employee of your own business? Are you working in the trenches/weeds and doing all the tasks? OR are you a Manager in your business, and are you outsourcing the projects that you don't need to do yourself, leaving you time to work ON the business not just IN the business. Perhaps you're already the CEO of your company, and you're looking at the big picture and making decisions based on analytics, finances and goals. Listen to this episode and learn what business structure is right for you. Where to start? Write down every single task you do in your business, no matter how small or big, and take stock of what you're doing. What can you outsource? What do you enjoy doing?
Top tips from Jenni:
Q: Is your business a hobby?
Jenni: “The term hobby business really came about because of the ATO, they allow you to earn a certain amount of money every year that you don't have to declare (*see your financial or legal professionals for more info about this) but it's considered a hobby until you earn a certain amount of money. The way that I define it, if you're talking about a hobby business, what we're saying is, it's something that you play with, it's something that you drop in and out of, it's not something that you do necessarily consistently.” A "hobby" business is a kind of more relaxed version of a business.
However, as soon as you're a registered business with an ABN, you're recognised as a business by the ATO and you have obligations!
Q: What type of business do you want and how do you want to structure your business?
Jenni: “I remember when I started, people were like, ‘Oh, you can't be a company unless you have staff’, ‘You can't run a business unless you do this.’ And there's all these kind of myths and kind of legends around what business was. I was like, this just doesn't make sense to me. Let's just strip it back right. I think that's where we have to kind of demystify it. That's kind of what we want to do today.”
“So when we start to talk about what business structure you want, there's a couple of ways we can do that. And one of the ones that I love to do is you write down all the things that you need to do the business and give them a title, give them a name, if it's you know, so might be production assistant might be your social media finance, whatever it is a you actually create the structure of your desired business and write that out and mapped it out early. And then you actually allocate which jobs you actually want to do, and which jobs you want to give to someone else. So you've actually just shifted yourself from being the person who does everything, the employee, into the manager, slash operator, but into that manager, how do things work. And over time, as your business grows, as you scale as your operations become more effective, you can actually then step out into that CEO role”
Jenni also shared the three levels in a business:
Employee: They deliver the product and run the operations they do the day to day stuff in a business.
Operator: They manage the processes, supply chain, production and customer experience.
Owner/CEO: They create engagement and partnerships, rebuild trust, look at synergies outside the business and think of ways to grow the business.
Kylie: “CEO is the big picture person that can sit back and have that opportunity to look at. So it's very much about working on it, rather than in it"
“Transitioning into a business is about finding the right resources and systems and processes to support your growth.”
Q: How do I actually start removing myself from the business that allows me then to just sit in my office and oversee things and not deliver things? And how does that shift?
Kylie: It's just a case of finding the right person. So I personally for me, I like to train someone to the Hello Media way of doing things, and I need them to have a passion for learning and expanding and growing"
Jenni: “100% correct. But also, it's that recognition that even when you train them up, they're not going to do it your way they're going to do their version of your work. So that requires a shift in your mindset to say, It's okay to let go, it's okay that it's not done by me.”
We can agree that it's about changing the stigma and the mindset around the levels in your business. It's not a bad thing to be the operator but it's about your long term succession, how you want the business to grow and do you want it to be there, when you're not.
“It’s also important to recognise that the roles that you take are actually fluid, there's no defined, you don't have to stay in one or the other, as you said earlier. But what changes is not necessarily the work you do, but it's the way you view the work that you do, and the conversations you have about that work.”
Q: What is the top tip for someone, particularly those that are already in the trenches in the business, for those already in the middle of it all, on where to go from here?
CEO DAY. Sit down and ask yourself these questions:
- Is what I'm doing adding value to the business? If not get rid of it or find somebody else to do it for you.
- What are the things in your business that you actually want to continue to keep doing? what are the other things that I can give other people to do?
Most importantly, but the biggest conversation that you need to have around the business is what do you want it to look like in the future, and making sure you have the systems to do to set yourself up for that in the future. Having that conversation early, that's you designing your business structure and how you want to run your business.
To sum up our topic today, choosing your infrastructure and creating one yourself is the whole point of being a business owner. Being an entrepreneur is creating a world that suits you, not putting your body, your mind and everything else into somebody else's structure created for you.
“Create your own structure. It's your business.
Or listen to our podcast here:
Watch this episode of our Business Bite-Size on YouTube to learn more: