How to Own an Income Stream in Professional Services: 4 Stages

by Rachel Steininger

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Many entrepreneurs start their businesses with the goal to own an income stream.  They desire freedom, flexibility, and financial opportunity from their business.  However, it's easy for professional service business owners to get stuck in a rut, where day-to-day tasks consume all your time, leaving little room for growth.

By better understanding the four-step process we share below, you can transition from being involved in every aspect of the business to focusing on higher value activities. 

We also share the secrets to owning a turnkey business operation that provides you with either a passive income stream or the ability to exit your professional service business at a higher multiple.


The Stages of Scaling

Scaling a business involves transitioning through different stages. 

Let's dive into each stage and understand the key characteristics and challenges associated with them.


1. In the Business

Especially when you start your professional services business or law firm, and even a long time thereafter, you may find yourself wearing multiple hats and handling every, to nearly every, task. You're the jack of all trades and a go getter.  

But this approach has its limitations.  While you have control down to the finest detail, you’re limited by the constraints of time.  Plus, even if you love your craft, there are high value and low value tasks, tasks you love and tasks you don’t.  There are also activities that you wish you could get to but never seem to. 

You have to handle administrative tasks, client fulfillment, and other day-to-day operations. This leaves you with limited time and resources to focus on strategic planning, business growth, and other high-value activities.

Staying in this stage holds you back because of limited time, overwhelm and the possibility for burn out. You can become the bottleneck in your own business, being responsible for all the tasks and decision-making. Working solely in this day-to-day grind also limits your ability to expand and scale your business, as you’re stuck doing everything yourself.

Since working in the business is not the ideal scenario for scaling a business, it’s time to consider the next stage.


2. In+: The In-Between Stage

Typically, we think of working 'on' the business as the next stage.  But for many business owners, this is a big leap and requires more resources than might be available.   

But as your business grows, it becomes essential to focus on higher-value activities and delegate mundane tasks. This is where the transition from 'in' to 'in plus' happens, where you begin to prioritize activities that only you can do and look at your responsibilities with a fresh perspective.

The main point of the 'In+' stage is to transition from doing all the tasks in the business to focusing on higher-value activities that tap into your highest value. 

Don't take this step if you want your business to feel like a neverending job.

In this stage, you start to delegate some of the mundane or administrative work and shift your focus to more strategic and higher-value responsibilities in your business. 

Those responsibilities may still be predominantly fulfillment oriented, but you do less of the lower value tasks and more of the higher value tasks.  This gives you the advantage of practicing delegation and setting up more efficient processes without losing sight of the day-to-day business.  

The difference between 'In+' and working 'In' or 'On' the business is that 'In+' is an easier step forward in the progression. And for many, particularly those you want to focus on practicing their craft (not running a business), it might be their ultimate destination.  

While the 'On' stage is vital to your business’ growth and your ability to own an income stream, not just a job, it isn’t for everyone.

Let’s explore that stage next.


3. On the Business

Working 'On' the business refers to activities and tasks that focus on the growth and strategic management of the business. It is about taking a step back from day-to-day operations and looking at the bigger picture.

When you were working 'In' the business, you were focused in the moment, the revenue you need to earn right now up to a short time into the future.  It’s that in-your-face urgency of meeting revenue targets and fulfilling client demands.  

By contrast, working 'On' your business is for a longer term ROI (Return on Investment).  This is the time to work on activities that no client demands but are crucial for the future of your business. This may include strategic planning and goal setting, marketing and sales systemization, as well as product design and development.

So in this stage, rather than ask how you can maximize the revenue earned immediately in the next hour, ask how you can use your hour to maximize revenue in all the future hours of your business.

And as you find answers to those questions, you use this 'On' the business time to start implementing the solutions that build value for your future. 


4. Own a Business, Own an Income Stream

The ultimate goal of scaling your business is to reach a stage where you own the income stream. At this point, you're no longer working 'In' the business or even 'On' it, but rather doing only as much or as little as you desire to do. 

You have the freedom to focus on other ventures or enjoy the fruits of your labor. 

This is the concept of a self-managed business.  Owning a self-managed business, or turnkey business, means having systems, processes and people in place that allow for seamless operations even without your direct involvement. 

One of the many advantages?  

By purposely shifting to an 'Own' focus, you open up opportunities to sell your business at a higher multiple.  By streamlining your business, you make it more attractive to potential buyers who can then see themselves stepping in and replicating your results. 

Four Advantages of a Turnkey Business

Without that systemization or 'turnkey' feel, business buyers may expect you to stay on, even with the transfer of ownership, to retain continuity.  Or they’ll reduce the price they are willing to pay because if you are the source of value, your exit will mean that value will exit with you.

But the advantages don’t end with just being able to sell your business.  

The more streamlined and systemized your business is, the easier it becomes for a team to step in and continue generating income while you’re still an owner.  That’s going to serve you as you sell your business, take an extended vacation, or even need to step away for an emergency or life situation.


Assessing Your Path To A Turnkey Business

To assess your position along this 4 stage journey and track your progress to building a turnkey business, look at your own day-to-day work and distinguish between what you do 'In' versus 'On' your business. 

'In' refers to focusing on current revenue and fulfilling existing demands. It encompasses client fulfillment, administrative tasks, and other activities related to servicing ongoing contracts. 

On the other hand, 'On' the business involves forward-thinking, growth-oriented activities. It includes strategic planning, people leadership, building systems, and preparing the business for future success.

Another way of thinking about the difference is in the context of ROI or Return on Investment.  Working ‘In’ your business has an immediate but usually single degree of return.  Like working on a current client project at $300 an hour.  

But working ‘On’ your business has a multiplier effect and builds you opportunities well into the future.  Spending an hour on something other than that billable hour may ‘cost’ you $300. 

That means that if you are working ‘On’ something that generates (or saves you profit-wise) $100 every single week going forward, that’s well worth the investment of that $300 loss.

Getting in that future mindset, or ROI (Return on Investment) mindset, will help you make the most of your ‘On’ the business time.


Delegation At Any Level

You might assume that the delegation required through these 4 stages of scaling is to other humans.  But that would be a mistake.  

Many of the lower value tasks in your professional services business can be automated or eased through the use of technology.  Systemization is as much at play as the human side of things.  Which is why People and Process must go together hand-in-hand.

Also remember that you can delegate to any level of the org chart, not just for the mundane or admin tasks.  Fractional services or coaching can be a huge benefit when you neglect to, or don’t want to, focus on your business yourself.

The key here, especially if you want out of the day-to-day grind, is that somebody has to do the strategic work.  Without strategic planning, building predictability into your sales and marketing, and thinking beyond the immediate concerns, you’ll stay stuck in that time-for-money rat race, rather than getting to own an income stream..

So if it's not you who will be strategic, consider who you can bring in to help instead.  That will get you closer to owning the income stream, rather than waiting for your skills or desire to catch up with your needs.


Conclusion

Scaling a law firm or professional service business requires strategic thinking, a growth-oriented mindset, and a determined evolution along these four stages.

By understanding where you are currently among the four stages of scaling, you'll be better positioned to make good decisions regarding delegation, automations and systems, and your own time and skill application.

Your journey along the path is an opportunity to level up your business and life.  Ultimately, this will help you reach your goal to own the income stream in professional services or law and to realize the freedom, flexibility and financial opportunity that you desire.

Own the Income in block letters with stacked 'zen' style rocks in the background
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