In this podcast of The Sweaty Startup, I’m going to talk to you about an essential skill for every entrepreneur and small business owner: Delegation. This may be the hardest, but most important, part of getting wealthy as you start your business. Now, let me share a fact: 99% of business owners fail at delegation, especially when it comes to delegating management tasks. Okay, so maybe I’m totally making this statistic up, but far too often it seems that most entrepreneurs lack this essential part of their role as a leader.
To clarify, delegation is not simply having someone obey orders, like answering phone calls, filing paperwork, or being a company go-fer. REAL delegation in entrepreneurship means having someone, OTHER THAN YOU, to do the work of making decisions that impacts the business’s bottom line: quoting jobs, hiring, training employees, selling new work, and deciding whether to buy something or not. It’s these kinds of things that really suck up a business owner’s time and cause them to be overloaded like my friend that I mentioned in last week’s Nick Huber Show Podcast; they find themselves working too hard, getting underpaid, and the end up never really taking their company to the next level.
Many people that follow me on Twitter often ask for resources on how to learn more about delegation, but in my mind there really aren’t many. Delegation isn’t something you can just learn from reading a book. There are no one-and-done solutions that make this easy, that’s why so many entrepreneurs struggle with this. The reality is you learn delegation by practicing clear and concise communication to empower your employees to make decisions based on a framework you create.
When working to delegate tasks, clearly and simply communicate on a level that makes it easy for your employees to act and make decisions on their own. Don’t overload them with a bunch of information they don’t need. Give them very simple instructions that allow them to do what needs to be done; help THEM succeed. Don’t fall into the tendency to create glass ceilings for your employees by only allowing them to rise to the level of their incompetence and just do their job. Start with giving employees simple decisions, and if they make good decisions, you give them more important decisions. If they make bad decisions, give them less important decisions. The key is to help your employees rise PAST their perceived potential, and develop in THEM the ability to manage and decide on their own.
Straight up, delegation is a learning process and as such it is important that you seek to go through this process in a low-risk environment. Start at the bottom and work your way up; start in a low-risk business, a business where you are trading your time for money. After developing those delegation skills, transition to something with higher-value work; find your wheelhouse where 20% of the work is producing 80% of the results. Continue this process until you have developed the ability to delegate and take those higher-stake risks.
Let me explain:
When I started my business ventures and was new to learning how to manage and build a startup, I did this in a low-risk industry. To say it bluntly, I was in a really shitty business for ten years: pickup and delivery student storage. This was not an easy business, but it had a low amount of capital-risk to get it off the ground; we boot-strapped the whole thing…and it was rough. We had 6 full-time employees and 300 part-time employees. We were doing pickup and delivery in major cities all across the country. We learned a lot about delegating processes and managing that business because we could only be in one place at any given time. In the end we made a good amount of money as our beginning investment capital. Low-risk but moderate return.
From that sweaty startup, we put 500 grand in the bank and we decided to jump into a little bit easier line of work with a little bit more risk: Self-storage development. Still not a great business and it had quite a bit of risk: several new developments, higher initial investment capital, and stress. We went way over budget, but we used a lot of what we learned that we did well in that business. From there we took another step up that capital-risk ladder into self-storage acquisition and management. We took things one step at a time from a dirty boot-strapped sweaty startup to the very high capital-risk business I am in today, which is real estate, private equity.
We went from a very hard business with very low risk and equally very low reward, to a little bit easier business, higher risk, but higher reward. Along the way we took every opportunity to learn and practice everything we could about delegation. We learned how to find and hire quality people to work for us, develop those individuals to manage and function on their own. In the end we were able to take ourselves out of the business over time, step by step, to allow us to devote our time and energy into higher capital and riskier investments. It’s because of that patience, practice, and delegation that we are now able to gain far greater reward from our investments.
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Three Key Takeaways:
- REAL delegation in entrepreneurship means having someone, OTHER THAN YOU, to do the work of making decisions that impacts the business’s bottom line
- Help your employees rise PAST their perceived potential, and develop in THEM the ability to manage and decide on their own.
- Delegation is a learning process and as such it is important that you seek to go through this process in a low-risk sweaty startup environment
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