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Fred Learns to FLIP: How to Grow Your PRACTICE into a BUSINESS

Nov 03, 2020

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Fred was a structural engineer. He started out working for a general contractor in the construction of small bridges at first; and then gradually worked his way up to some large projects.

While he loved what he did, it was difficult to predict how much work his general contractor would get in any one year. The problem was that the only people who would hire Fred's company were municipalities who wanted to build a bridge. Not just any bridge. It had to be a design-build project. Design-build meant that the same contractor who designed the bridge would build the bridge. Most bridges were designed by engineering firms who were separate from the contractor. That meant that Fred wasn’t kept very busy.

Fred decided to leave his job working for the general contractor and start his own structural engineering firm. At first, his only client was the old general contractor he used to work for.

It was a great arrangement. The general contractor didn't have to pay Fred unless they had work; and Fred could seek design work from others when the general contractor didn't need him.

It was difficult at first. Fred earned half of what he made as an employee in his previous company. As Fred developed some solid sales and marketing skills, he was able to generate more interest in his design ability; and was eventually working full-time as an independent structural design engineer. Eventually, he hired an administrative assistant to do all his paperwork and billing; an Auto-CAD technician to draft his drawings; and a junior engineer to help him with some of the design work.

While he seemed like he was doing well, the money wasn't that great and he was working all the time. He found that:

- he spent 40% of his time doing design work,

- 40% of his time selling his services to government decision makers; and

- 20% of his time directing the work of his underlings.

After he paid his expenses, he tended to make just a little more than he had made as an employee, with twice the stress level.

In one of Fred's networking events, he met a guy named Coach Russ. This guy indicated that he helped business owners grow and become profitable while reducing the amount of time they spent at work.  Fred remembers laughing when Russ told him that. Fred couldn’t see any way he could grow, make more money and work less. It just didn’t make any practical sense.

Still, Fred was curious. He was facing a sort of busyness that yielded little in the way of profits and consumed a lot of his personal time. He was curious what kind of magic Coach Russ could perform on him. He called Russ and they set up what Russ called a Discovery Session.


Fred cancelled this initial meeting four times before they finally met at Russ's office. It seemed like every time Fred wanted to meet, something would come up that required his personal attention.

Russ started their meeting, "It seems like you're a busy man. Four reschedules is probably a record for a Discovery Session."

Fred responded, "I know. I'm sorry for all the delays. I had intentions of meeting, but something always came up at the last minute."

"No apology necessary. I'm glad we could meet. I’m curious. Why couldn't others in your office handle whatever it was that you were called to do to make you reschedule our meeting?"

"We're a really small design firm, Russ. I do most of the work and my staff basically helps me do my work. Two of the delays were due to design deadlines that were pending that I needed to meet. I was already working nights to meet these deadlines as it was; and I couldn't afford the time to drive over here and meet with you."

"Interesting. What caused the other two delays?"

"Those delays were caused by a high-maintenance customer demanding I meet with them at the same time I had scheduled our meeting. Because they had to coordinate their meetings with so many other players, I couldn't force them to reschedule their meeting."

"That certainly makes sense. Could someone else on your staff have attended those meetings?"

Fred laughed, "These are pretty high-level meetings with very important clients. I have a rookie staff with an Auto-CAD technician, a rookie engineer and an administrative assistant. The best they would have done is taken notes. My clients would have been furious that I wasn't there in person."

"Got it. Let's talk about you. What prompted you to set up this meeting in the first place?"

Fred told Russ his story, how he broke away from being an employee of a general contractor only to find himself more stressed and working more hours for only a little more money.

As Fred finished his story, he said, "In our networking event several months ago, you claimed that you helped business owners grow profitably while spending less time at work."

Russ smiled, "Yes, I did. If my memory serves me, I believe you chuckled."

"Yeah. Sorry about that. I guess I'm now curious if you can do this for me?"

"I probably can. However, it's not really my work that will help you; it's YOUR willingness to shift the role in YOUR company that will make the difference."

"I'm not sure I understand. I’m working hard, Russ. I don't know what more I can do to make my small engineering firm work better."

Russ smiled again, "That's the point. You’re doing all the work. You cancelled our meeting four times because you’re too busy working IN your business to work ON your business."

"That's where you lose me. If I were to hire all these people to do the work of my business, I would make even less profit than I make today. I simply can't afford to hire the help you say I need."

"How do you know that you can't afford to hire help, Fred?"

"Look. If I'm barely making enough now; and I'm doing all the work. How can I afford to hire more people?"

Russ dodged Fred's question, "I'll tell you what. I want you to answer your own question. If you want to work with me as your business coach, your first objective is to create a business plan that’s profitable and doesn't have you doing one thing in your business."

Fred reacted, "That's impossible! Are you listening? I told you that I'm barely making it now. How on earth can I create a plan where I'm doing nothing in my business and still making money?"

"Fred, you’re used to earning a paycheck as an employee. And you’re now engaged in a practice where you have some assistants; but are overwhelmed with work. For you to grow, you need to shift your thinking. You first need to become a manager; and then become an entrepreneur."

 "An entrepreneur? I am an entrepreneur. I answer to no-one but my customers."

"You’re striving to create a practice. There’s nothing wrong with a professional engineering practice. The challenge with a practice is that you provide ALL the expertise. This means that practices are limited to your ability and your time. That's why you're so busy."

"Okay. How can I create this business plan if I don't even think it's possible?"

"You’re an engineer. A business plan is simply math. You can create a spreadsheet that shows your expenses with several employees doing the work; while you simply manage these workers."

"I suppose. I'll put together the ‘business plan’... but I'm not convinced it will actually work."

Russ smiled, "That's all I ask. If you hire me as your coach, I’ll help you shift your perspective. You just focus on the math for now."


It took a month for Fred to get back to Russ with his business plan. The plan took time. Trying to set up a meeting time that he wouldn't have to continually reschedule was a different matter. In fact, they decided to conduct their meeting via a video call because it would take Fred too much time to drive back and forth to Russ's office.

Fred started, "I have to admit, Russ. This business planning exercise surprised me."

Russ asked, "How so?"

"I created a fictional engineering firm with three full-time engineers, an office manager, a salesperson, and an Auto-CAD technician. In my fictional firm, I’m managing these folks, not doing any actual work, and am able to bill enough time with my engineers to make it all work."

"Wow! It sounds like your thinking may be shifting."

"While I've made this work on paper, making this work in real life is another problem."

"Tell me the opportunities you see arising with your plan.'"

"What? I didn't say opportunities. I said problems."

"The word problem indicates that you see obstacles. The word opportunity implies that you have yet to come up with a solution. Which word would you prefer to use?"

"Okay. Here are my OPPORTUNITIES. I do all the engineering now and I'm quite good at it. In fact, I believe that most of my clients hire me because of MY expertise."

Fred paused expecting that Russ would respond to his first OPPORTUNITY.

Russ commented, "Please continue."

"Then there's the problem with sales. My prospective clients expect to talk with me. I'm the expert. They want to see who they’re hiring in order to give me their business. They won't trust some wet-behind-the-ears salesperson to convince them to use me for high-profile bridge designs."

Fred paused and Russ asked, "Is that it?"

"Those are pretty big deals. How can I solve those prob... I mean OPPORTUNITES?"

"Fred, you’re going through one of the roughest transitions any manager ever has to go through. I call it the FLIP. For you to grow, reduce your working time and make real money as an entrepreneur, you have to FLIP your expertise from you to your team."

"Are you saying that I need to train my people?"

"Quite the contrary. To successfully navigate the FLIP, you need to change the direction of how expertise flows in your engineering firm."

"I don't get it. My clients hire me because of my expertise. If I hire rookies and expect them to deliver for my clients, I'll lose business."

"In order for the FLIP to work, you can't hire rookies. You must hire experts who are the new creators of your firm's expertise."

"That's going to cost a lot of money. How am I going to come up with this money?"

"You’ve created a viable business plan that demonstrates that you will be profitable paying your new experts while you simply manage them. Right?"

"Yes. But how do I get to this fictional place, if I can't afford to hire these people today?"

"As I said before, this FLIP is not easy; and it's certainly not intuitive to most high-producing workers like you. I’ll tell you what. If you can block off a time once a week for coaching sessions, we can get through this together."


Fred took Russ up on his offer and attended Coaching Sessions once a week. He was amazed that he even found time for these sessions. He also found that each subsequent session was easier and easier to fit into his schedule.

His first step was empowering his current rookie engineer, Robert, to do more work. Robert attended meetings and was able to weigh in on some critical engineering topics. Russ coached Fred to keep his mouth shut and give Robert a chance. Fred was amazed at how well Robert adapted to his new role as expert instead of helper.

Next, Fred hired a salesperson. She was an engineer who worked for a competitor; and had relationships with the government officials he needed to sell to. Veronica was looking for lower hours and less engineering. The sales position that Fred offered was ideal for her.

As sales picked up, Fred hired an additional veteran structural engineer who was amazing at bridge design. He offered solid expertise in engineering and brought in some design processes that made Fred's techniques look primitive by comparison.

It was a financial challenge at first. But week after week, Fred noticed he had more time to work ON the business. His new employees were taking ownership of their individual areas of expertise.

Within a year, the FLIP was complete. Veronica was fully in charge of sales. Fred was a little embarrassed when his long-time clients claimed Veronica was more pleasant to work with than he was. His new engineering team was completing all the design work; and Fred was doing the true work of a CEO.

Fred was creating a vision of how he could duplicate his team in other states and compete for large bridge projects that he could have never completed with his one-man practice.

Not only was Fred working less, but his firm was starting to make serious money.  He reminisced about how he would’ve driven himself to an early grave had he continued his high-stress, heavy workload life that he had a few years earlier.

Fred had successfully navigated the FLIP to transition from what Russ called “technician” to “manager”. Fred was now working with Coach Russ once a month to eventually transition from “manager” to “entrepreneur”.


In our story of Fred, he followed the typical path for most professionals. He worked as an employee for a time. When he felt like he was limited by his job, he started his own engineering practice. Fred was relatively successful for a short time and was growing his revenue and even his staff. This is where Fred’s engineering practice stalled out and is the source of today’s business lessons.

If you read last week’s blog post about Brooke, we covered a similar transition from technician to manager. Today, I wanted to highlight a specific characteristic of this transition that I call the FLIP.

Most of us think of growth as learning more and getting better at what we do. That’s a natural path for most professionals. Whether you remain as an employee of a growing company or grow your own business, at some point, you’ll have to FLIP.

The reason I call it a FLIP is that it’s an ABRUPT change or reversal of direction. One day you’re doing all the work. You provide the expertise to your business. You often create the wealth to the people who work for you.  The next day your underlings are doing the work, providing the expertise, and creating your wealth. Psychologically, this is very unsettling for many Type-A personalities. As it happens, most Type-A’s start businesses.

Type-A FLIP Obstacles

The obstacles that stand in the way of Type-A’s when it comes to flipping are: 1) momentum; 2) ego; and 3) control. These three qualities are what got most Type-A’s to the point they are in their business ownership journey. If something needed to get done, they got it done. Unfortunately, each one of these traits needs to reverse in order to transition from technician to manager. Let me explain…

Momentum

Let’s face it for your entire life from childhood all the way up through adulthood, you’ve been taught that you benefit from your work output and your skill. And, now a business coach asks you to change this momentum and turn your brain off while your workers do all of the thinking. It feels unnatural and you will resist this change with decades of conditioning.

Ego

Ego is a tricky thing. When it’s too small, we lose our confidence and retreat. When it’s too big, we tend to talk down to others and think too highly of ourselves. To FLIP, you won’t change your hard-wired personality, but you must be fully aware of how your ego gets in the way. Business owners will often adopt a fluctuating ego. When their business is succeeding, they think highly of themselves. They believe they’ve figured out some magic formula that all those other business owners can’t get. When their business is failing, they get down on themselves wondering why they crash while others seem to be succeeding with ease.

As a business-owner technician, this ego is tied to the quality of work and the success of the business. It’s quite unnerving to break this tie, when it’s worked for you for so long as an employee and now a business owner. At the heart of this thread is our third obstacle of “control”.

Control

This ego and momentum show up as a type of control. People may call you a control-freak. You probably call yourself a control-freak. Frankly, control is a good thing. No one wants to work for a company that is out of control. However, the means of control must change for any company to grow.

In our story of Fred, he seemed willing to give up control of small ancillary tasks like bookkeeping, administrative work, and low-grade engineering work. But when it came to his core engineering work and directly interacting with his customers, he believed he needed to take control.

Once he gave up this control, he was almost surprised that his customers connected with his staff better than with him.

Managing People

This leads me to an apparent objection to this whole idea of FLIPPING which is, “Jeff, what if my employees fail when I give them control?”

When you give other people control, they’ll fail. It’s not a matter of IF they’ll fail. And when they do, there are a few directions you can take. You can decide that this “giving others control” idea was a bad idea, and you can take control back never to make that mistake again. You can help grow your staff to minimize the number of failures in the future. Or, you can fire your staff and replace them with more competent people.

This is one of the toughest decisions that managers face. They need to discern whether their people can grow into positions of expertise; or they need to hire different people with different skills and abilities. This podcast is not long enough to go into the intricacies of this decision. However, I can tell you that if you go back to taking over control, you won’t grow your company.

Money

The last topic I want to illustrate in today’s podcast is this very real concern over money. If you’re boot-strapping any professional practice, it will be more costly to FLIP, than to do business as usual. In our story, Fred first created a business plan of how things would look once he had his grown business with his staff of engineers. In Fred’s case, his main goal was to envision a business where he wasn’t required to be a daily employee of that business.


Once that end goal has been envisioned, you can create a path to get to that vision through transition steps. If you do it right, you’ll see that investment is required to move through the transition of a FLIP. This means that your company will experience a momentary loss of income. In most FLIP’s, you hire a salesperson who you can’t afford until they succeed at selling. You’ll also hire a high-paid professional to take over your role as the expert. Both positions will stress your finances.

If you plan, you can build the investment into your financial forecast and pricing. That’s why the first thing that Coach Russ told Fred to do was to create his business plan and his vision.

If you’re in this situation, I strongly urge you to do the same.

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