From Furnace to Thermostat: The Real Transition from Operator to CEO

It’s 11:00 p.m. on a Tuesday night, and Hank is sitting at his desk in his home office, feeling exhausted. He’d been on the road or on various job sites from 6:00 a.m. until he got home at 5:00 p.m., and then he’d eaten dinner in his office while he paid bills, sent invoices, and updated the bookkeeping software.

“Is this really what being a business owner is like?” he says. “We make $2M in revenue, and I’ve trained my other technician, but something isn’t adding up. Why am I still spending so many hours working? Why can’t I completely step away?”

Although many business owners like Hank start with the right steps, the transition is still very challenging, and it takes time. However, there is one truth that many business owners eventually learn when trying to make the transition: The transition from operator to CEO is not a mindset shift. It is a systems shift. The mindset follows the systems.

The Furnace at $2M: Running Hot, Running Alone

As mentioned above, Hank’s business earns $2M in revenue. However, he’s still indispensable. To him, it feels like there are only two paths for his business: the first one leads to better work/life balance with lower revenue, and the second, which is where he is now, leads to higher revenue, but the owner feels indispensable.

Hank sighs at this thought before stepping out of his office for a quick break to take a peak at his family, who are all in the living room. He stands where he’s able to see the room, but his family can’t see him. He notices that one of his son’s friends is over for a playdate. He smiles as they play and chat away like no one else is listening.

“My dad says your dad owns his own company,” the friend says. “That’s so cool. I wanna be like your dad when I grow up.”

“I don’t,” his son says.

“Why not?” The friend asks.

“Because he hardly spends any time with us,” his son answers. “When he’s here, all he does is work in his office. I’m not even allowed to go in and say ‘hi.’ It’s rare for Dad to eat dinner with us.”

“Oh,” the friend responds.

Hank’s heart breaks. He’d been so wrapped up with work that he hadn’t realized how much of an impact it had on his son. And this made him realize that he had to make a change. If not for himself, than for his son.

Installing the Ductwork: What 90 Days of Financial Systems Built

Hank spent the next 90 days implementing several financial systems, the first being that he started pricing jobs by the true cost instead of relying on a gut feeling. He discovered that his company had lost a lot of profit due to “guesstimated” job prices. Once he priced jobs correctly, the company started making more revenue.

Another system Hank implemented is that he created a cashflow forecast for each quarter. This allowed him to see how decisions like hiring another technician, buying materials in bulk, signing up for another software subscription, etc. would impact the company on a more long-term basis. Having the future documented on paper allowed him to make decisions proactively instead of reactively.

The Setpoint Shift: When You Stop Reacting to Heat and Start Setting the Temperature

Hank used to make a lot of decisions reactively instead of proactively. Now he’s able to see potential stressors and issues down the road before they happen and plan accordingly. He spends less days scrambling to get everything done and more checking tasks off his to-do list and learning about business strategies.

Bringing it All Together

It’s been 90 days, and Hank has finally found his rhythm. He no longer spends his evenings eating dinner alone in his home office while he does CEO tasks. He now eats dinner with his family and enjoys time with them during and after dinner, too. He also no longer feels constant stress, anxiety, or dread of what the day holds. Now that he has these systems in place, he’s able to prevent the vast majority of stressors or at the very least plan ahead for them if they’re unavoidable.

Call to Action

Answer this honestly: in the last 30 days, how many financial decisions did you make reactively (in response to a problem) vs proactively (from a plan)? Write the ratio down.

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Disclaimer: The information in this post is intended for general guidance purposes. For advice specific to your business finances or taxes, consult a licensed accountant or financial advisor.