Assuming you are in tune with understanding the dynamics of the industry and are ready to invest in building and growing your business, it’s time to look inside yourself to determine what it is that you really want and need for your business. That is, what sacrifices are you willing to make to achieve your goals? What exactly are your goals? What does the endgame look like for you personally and professionally? Too often, entrepreneurs don’t reflect on these questions strongly enough and end up in a position that doesn’t match what they were originally looking for. So, how do you figure this out before you get too deep into a situation in which you’d rather not be?
You need to ask yourself, do you want to build a business or a practice? We aren’t talking about semantics, as the differences between the two can be quite stark. Understanding the differences involves answering questions about how you acquire new business and whether you like, or are even good at, doing that. Do you want to manage others? Are you prepared to understand and manage the financials? How will you maintain the required discipline needed to oversee your business? A full-fledged business requires many more skills, knowledge, tools, and demands than a smaller, one- to three-person practice, with neither being better nor worse than the other.
You will also have to decide the extent of your involvement and commitment to building your enterprise. So, without making a value judgement on which is better or worse, what does the difference between being involved versus committed look like? If you are just involved, then while you might want to be at work, more often than not you feel you have to be; you can’t wait for a vacation to recharge. Whereas, if you are committed, you can’t wait to be at work and look at time off as a necessary evil; you have no trouble falling and staying asleep and can detach from the firm at any time, rather than thinking about it 24/7.
In a practice, you love the work but find it difficult to delegate to others; while in a business, you prefer orchestrating a larger cast to sell and deliver the work for you. When it comes to customers, although you know you need them to keep yourself in business, in a practice, you sometimes see them as getting in the way of what you really think needs to be done; in a business, you’re passionate about delivering the best service to them. Finally, in a practice, you see the firm as totally dependent on you and your relationships as the founder and owner of the organization. Therefore, you own its success instead of creating a more collaborative environment in a business where success is shared with your colleagues. Again, while it may sound like the characteristics of a practice are more negative than those associated with a business, it all comes down to a matter of personal choice. Either can be a success or failure, but the pathway to getting there will be vastly different.
What this decision comes down to is your definition of work-life balance. There is little question that building a business is a more monumental effort than creating a highly successful practice. The latter typically offers you much more control of your schedule, finances, and personal choices than managing a large business. But, a business isn’t for everyone. Knowing this ahead of time will not only keep you from making personal and professional mistakes but allow you to enjoy your work the way you want to.
In summary, the differences between a business and a practice are numerous: their structure, operations, equity, offer (and how it is delivered), brand, overhead, competitive advantage, scale, and sales distribution, among others. You’ll need to figure out what you want and need before you can define how each of these will be operationalized in your firm.