Delegate or die: the self-employed trap

Most self-employed people get caught in the delegation trap.

You’re so busy, doing everything yourself. You know you need help, but to find and train someone would take more time than you have! So you keep working harder, until you break.

Here’s my little tale of how I broke into the delegation mindset.

In 2001, CD Baby was three years old. I had eight employees but I was still doing everything else myself. Working 7am to 10pm, seven days a week, everything still went through me.

Every five minutes, my employees had a question for me:

• “Derek, some guy wants to change the album art after it’s already live on the site. What do I tell him?”
• “Derek, can we accept wire transfer as a form of payment?”
• “Derek, someone placed two orders today, and wants to know if we can ship them together as one, but refund him the shipping cost savings?”

It was hard to get anything done while answering questions all day.

I felt like I might as well just show up to work and sit on a chair in the hallway, just answering employees’ questions, full-time.

I hit my breaking point. I stopped going to the office and shut off my phone. Then I realized I was running from my problems instead of solving them. I had to fix this, or I’d be ruined.

After a long night of thinking and writing, I got myself into the delegation mindset.

I had to make myself unnecessary to the running of my company.

The next day, as soon as I walked in the door, someone asked, “Derek, someone whose CDs we received yesterday has now changed his mind and wants his CDs shipped back. We’ve already done the work, but he’s asking if we can refund his set-up fee since he was never live on the site.”

This time, instead of just answering the question, I called everyone together for a minute.

I repeated the situation and the question for everyone.

I answered the question, but more importantly, I explained the thought process and philosophy behind my answer.

“Yes refund his money in full. We’ll take a little loss. It’s important to always do whatever would make the customer happiest, as long as it’s not outrageous. A little gesture like this goes a long way to him telling his friends we’re a great company. Everyone always remember that helping musicians is our first goal, and profit is second. You have my full permission to use that guideline to make these decisions yourself in the future. Do what makes them happiest. Make sure everyone who deals with us leaves with a smile.”

I make sure everyone understood the answer.

I asked one person to start a manual, and write down the answer to this one situation, and write down the philosophy behind it.

Then everyone went back to work.

Ten minutes later, new question. Same process:

1. Gather everybody around.
2. Answer the question, and explain the philosophy.
3. Make sure everyone understands the thought process.
4. Ask one person to write it in the manual.
5. Let everybody know they can decide this without me next time.

After two months of this, there were no more questions.

Then I showed someone how to do the last of the stuff that was still my job. As part of learning it, they had to document it in the manual, and show it to someone else, too. (Learn by teaching.)

Now I was totally un-necessary.

I started working at home — not going into the office at all.

I had even taught them my thought process and philosophy about hiring new people. So our two newest employees were entirely found, interviewed, hired, and trained by other employees. They used that manual to make sure every new employee understood the philosophy and history of CD Baby, and knew how to make decisions for themselves.

I’d call in once a week to make sure everything was OK. It was. They didn’t even have any questions for me.

Because my team was running the business, I was free to actually improve the business!

I moved to California, just to make it clear that the running of things was up to them.

I was still working 12-hour days, but now I was spending all my time on improvements, optimizations and innovations. To me, this was the fun stuff. This was play, not work.

While I was away, my company grew from $1M to $20M in four years — from 8 to 85 employees.

There’s a big difference between being self-employed and being a business owner.

Being self-employed feels like freedom until you realize that if you take time off, your business crumbles.

To be a true business owner, make sure you could leave for a year, and when you came back, your business would be doing better than when you left.

(If you’re interested in this stuff, read a book called “E-Myth Revisited” by Michael Gerber.)