What does working ON your business actually mean?

The advice is often thrown around that business owners should dedicate time to working on their business as well as in their business. But do you ever wonder what it is exactly you should be working on? Let's break it down.

First, here are some practical distinctions to compare working 'on' and working 'in':

Working 'on' your business (i.e. planning)	Working 'in' your business (i.e. doing/implementing)
Making a plan and updating it	Implementing that plan
Preparing a budget or forecast	Measuring your actual results against the budget or forecast
Identifying risks for the business and how to mitigate them	Implementing ideas to eliminate the risks
Deciding how to structure and resource the business	Employing the team or external contractors and ensuring they're doing the right things
Monitor overall performance and deciding how to improve	Actioning those ideas to improve performance
Deciding how best to finance the business	Arranging that finance

Now that the key differences have been explained, here are the five most important activities you should be doing with your business to drive success:

1. Prepare a business plan and update it annually. Tip: Do this in the last month of your financial year or the first month of the new financial year.

2. Prepare a budget and forecast for the upcoming 12 months. Tip: Do this in conjunction with your business plan and review it annually.

3. Report against that plan and budget monthly.

4. Communicate the plan and the results to your team.

5. Set time aside each month to review your progress, your numbers, your business structure and any risks and opportunities that exist to improve the business.

How much time should you set aside to work on your business?

Working on the business doesn't need to be a full-time task, but you should make sure you're regularly allocating sufficient time to focus on it.

A good guideline is to be working on your business one to two hours each week, while allowing for a half-day progress check in each month to ensure you're on track.

Also, set aside one or two days each year to go off-site and update your business plan and structure. Best practice is to get someone independent of your business to help you establish and maintain these regular disciplines and hold you account to really improve your business.

Business plans and budgets are our bread and butter! Let us know if you'd like help crafting yours.