It should go almost without saying that working too many hours for too long is bad for your health and the well-being of your family—two things you absolutely need to nurture to have a chance to thrive when the economy finally recovers. Many overworking, and as a result, overstressed, business owners say they would love to work less, but argue that they can't because they absolutely know that without their 60-hour weeks they would quickly go broke. Even in a tough economy they are almost always wrong.
It's our experience that owner overwork is actually a big reason why a potentially successful business closes. If you can scrape by only because you lay off key employees and work 60 to 70 hours per week yourself, you need to face the fact that your business is not financially viable. You are not really in business at all. Instead, you have hired yourself, at a rotten wage, to do a task no one values enough to allow you to generate a decent profit.
Fortunately, even when the economy is tanking, in most instances overwork isn't necessary. Businesses that really meet customers' needs offer many opportunities for an owner to be more productive in less time. By learning to concentrate on the activities that count most, most entrepreneurs can achieve the same results in up to one-third fewer hours.
The Danger of Burnout
Most well-run small businesses become more profitable—often far more profitable—as they age. True, an economic downturn can temporarily interrupt this steady growth trend, but it's nevertheless important to realize that if you make good decisions, an economic downturn of a year or two won't derail long-term success. In fact, because an extended recession will flush out weak competitors, once it ends your business is likely to quickly grow larger and more profitable.
In short, growing a successful business is like running a marathon, not a hundred-yard dash or even a mile. To go the distance, you must adopt a work schedule that lets you pace yourself. Many new small business owners, especially those who face a profit-killing recession, fail to understand this and as a result burn themselves out and quit, in some instances just when their businesses are poised to make good money.
EXAMPLE: Sal and Patricia, each a 30-something mother of young children, open Z-Pot, a business that imports and wholesales large glazed pottery planters from Southeast Asia, and immediately begin making a solid profit wholesaling their unique wares to about 25 nurseries and half a dozen indoor garden shops. In addition, they open their own retail outlet to profitably dispose of overstock and slightly damaged goods.
Now working reasonable hours, Sal and Patricia are content to keep overhead low in their smaller operation so they stay in the black. They both know that when the recession ends and sales jump back to historical levels, Z-Pot will be positioned to achieve significant profits.
But two years later, the economy turns down, and Sal and Patricia have to lay off a couple of employees and begin working much longer hours themselves. On top of their family responsibilities, this leaves both women feeling exhausted and even depressed much of the time. Patricia's husband, whose own career teaching at a university is going well, begins to strongly suggest that their family life would improve if Patricia sold her share of the business and stayed home with the kids for a few years. Not wanting to give up Z-Pot, but recognizing their problem, Sal and Patricia decide to close their retail operation, negotiate their way out of the store lease, and concentrate all their energy on the core wholesale operation. Although they miss the additional income, they both appreciate the extra time. And then an exciting thing happens. Because Sal, who no longer has to worry about the retail shop, has time to do more marketing, and because a competitor goes out of business, Z-Pot is able to land several large new nursery wholesale accounts. In addition, to get rid of dinged-up inventory, Sal and Patricia hold their first annual three-day blowout sale. To create a come-and-get-it sale frenzy, they mark some pots down to their cost, but they also mix in plenty of pots at a decent markup. The sale brings in enough cash to catch up their accounts payable and put some money in the bank besides.
Working a reasonable schedule, with the occasional week or two off, lets you stay focused and interested in your work and attack your responsibilities with drive and enthusiasm. Of course, occasionally you'll need to work extra hours. But if you do it for an extended period, your sense of personal well-being begins to erode, your families' happiness declines, and your quality begins to drop off.
Maybe you are now thinking something like this, "I'd love to work a 40-, or even a 50-hour week, but if I do my business will surely go under." Perhaps, but when we look around at friends whose small businesses have done extremely well over a number of years, we see no one who consistently works more than a 50-hour week, and many who average fewer than 40. The few who regularly put in ten-hour days compensate by working fewer days per week or taking at least a month's annual vacation. In other words, virtually every successful small business owner we know has adopted a work schedule that provides them time to have a life. And it doesn't seem like a particularly lazy or pampered group—these people seem to reflect an important entrepreneurial truth: In fat or lean economic times, the ability to create a business that effectively and profitably meets the needs of its customers, not the determination to work long hours, is the key to success.
Interestingly, many successful people say that although they do not put in six 13-hour days every week, that doesn't mean business isn't on their minds. Several report coming up with their best, most creative business ideas when they're swimming laps, tossing a Frisbee to the dog, or just taking a walk—away from the emails, phone calls, meetings, and other distractions that crowd days at the office, store, or factory. One friend puts it like this, "Busy work—doing any one of thousands of little tasks at the office—doesn't improve anything important about how my business operates, certainly not its profitability. Just the opposite. To have time to focus on important initiatives—most importantly, how to better meet the needs of my customers—I must take the time to think, something I simply can't do well when I'm tired."
Don't Get Lazy
Although working too hard is the more common situation, the flip side—working too little—can also lead to problems. If during earlier times you got used to being comfortably solvent, you might have transformed from hardworking ant to showboating butterfly almost without realizing it. Now that your business has hit a rough patch, what do you do?
It is easy to understand why you wanted to take a little time to flit among the flowers, golf balls, sailboats, or motorcycles. But understandable or not, going walkabout for any extended period is always a mistake. Few, if any, of your employees who have worked so hard to help your business succeed will have a similar opportunity, and many will almost surely resent you. And especially during hard times, you're courting disaster if you withhold your attention at the same time key employees become disaffected.
If you no longer want to stay involved in the day-to-day management of your successful business, you may be able to reduce your managerial role by delegating, while concentrating on another important part of your business, such as new product development. But if there really is no part of your business that truly interests and engages you, your best bet is to sell it. That way, you allow the business to move under committed new leadership that's prepared to act quickly in tough times, while you have the freedom to do other things. Later, if you want to recommit to being a business owner, you'll have the financial wherewithal to start fresh.
Keeping Your Priorities Straight
Ask retired businesspeople you admire to tell you what they learned about keeping work, family, and personal time in perspective, and one thing you probably will not hear is, "If I had to do it all over again, I would have worked lots more hours." It's far more likely that they'll advise you to spend more of your life's energy developing personal interests, protecting your health, and spending time with family and friends. Of course, when a business is hit by a large negative event, be it a hurricane, fire, or recession, it's often necessary to work longer hours, sometimes much longer hours, to surmount the crisis. Fine, as long as you are working extra hours as part of a sensible, goal-driven plan to get the business back on its feet.
Another way to think about how to fit your work into the type of life you would like to lead is to make a list of the things you really care about. For many people, it would look something like this:
- stay close to our families
- have time to share family responsibilities and spend happy time with our spouses
- spend time on personal interests (and develop new ones)
- stay physically active and otherwise protect our health
- spend time with friends, and
- do work we enjoy and that pays well enough to adequately help support our families.
Assuming your list is even a little like this, it's crucial to notice that work is only one item. And once you do, it should be easy to see why working so many hours that you leave inadequate time for other priorities is a poor way to lead your life over the long term. Of course, if work, work, and even more work were the only way to ward off starvation or keep a roof over your head, it might be your only choice. But in 21st-century America—even in periods of sharp recession—there are a huge number of entrepreneurial opportunities. Don't become so obsessed trying to save a loss-making enterprise that you fail to see that other opportunities abound.