For most business owners, the saying “one step forward, two steps back” sounds miserable, but in many cases, taking a step backward can propel you forward and actually change your life for the better.
As an entrepreneur, you have responsibilities outside work. These might include providing for your family’s needs, teaching your children values and growing your relationships. It’s a lot to manage, especially when you’re bogged down fixing issues in your business or exhausted from overwork.
If your business demands so much time that it becomes the obstacle that keeps you from doing the things you’ve always said you wanted to do, it can leave you feeling defeated and depleted, no matter how “successful” you are.
Business owners who feel stuck in their business must first create systems. These systems not only benefit you and your family. They benefit the people in your business and can fuel the growth of your business like wildfire when implemented properly.
My company recently walked a client through this process. I hope following this process will be transformative for your business and life, as well. The client and his family lived a life that from the outside would seem normal. They would take a vacation once per year and go out to dinner once or twice per week.
They would spend as much time together as they could, but something was missing, causing him and his family to suffer because of it. As a business owner, you can likely relate to this story. Things are going well enough — but not great. It’s not what you envisioned your life looking or feeling like.
Our client was a reliable and diligent business owner. He showed up when he said he would. His attention to quality fed his business so he got most of his business through word of mouth. In fact, he would have to turn business away because he was too busy. So, where’s the problem?
The problem was that he was the business. He had a couple helpers working for him, but it was just one small crew. If he couldn’t schedule something on his personal calendar, it couldn’t get done. He came to us looking to outsource his accounting. It was his first step to buy time back.
Over a few calls, he opened up about how much he hated his current business situation, so I asked him, “Why don’t you do what you did with your accounting and unload more of the workload and responsibilities in other parts of your business?”
The first step is always the hardest, because oftentimes, it’s a step back. Most business owners know that if they can start delegating in more areas of their business, they will be able to do what they want. They can live a life of financial freedom and time freedom. They can create more memories with their family and take back control of their life.
After some review, I explained to our client that he would easily qualify for equipment financing with little upfront capital. This would mean he could hire another crew, doubling his ability to serve his customers.
The key to duplicating yourself is duplicating the systems and processes that allow for quality of work to remain high. For most, this is the biggest step back. You see margins drop and your time expenditure temporarily increases. It is predictably more chaotic and uncomfortable.
On the other side of that hard work, though, is a fully operating replica of your workmanship without you doing the work. For people like the client above, this means not having to turn down jobs or work overtime. You can then duplicate your craftsmanship as needed to service growing business inquiries.
To do so, there are a couple of steps you can take in your business to help ensure it stays healthy as you grow. First is ensuring you have a personal runway: Lower margins will mean less available money for you as the owner. Be ready for this with your own finances by not making any large personal purchases that will overextend you before scaling. This should be obvious but can get you into trouble if you’re expecting to be able to pay yourself more in the beginning of the scaling process.
If you’re financing equipment and hiring more crews, your monthly expenses will increase drastically. Be prepared for this by ensuring you have a full pipeline. Make sure you allocate some of your budget to ramp up your marketing, and pay attention to the number of projects you earn from word-of-mouth referrals so you can estimate how many leads you’ll get per project your first team accomplishes.
Also, ensuring you have a lead generation system in place that you can dial up or dial back is key. Not just relying on word of mouth but having an avenue of getting leads through paid ads and understanding how much those leads generally cost and how many convert to customers will also allow you to have more security in scaling. It will feel less risky and you’ll have a feeling of investing your money into your future instead of risking the future of your company trying to build it bigger.
Eventually, you will be able to fully step back and own the business instead of being owned by the business. But how? Create leaders from within your organization. Train them to take ownership of their work by incentivizing with bonuses tied to profit earned and created. Create bullet-proof standard operating procedures that allow high-quality work to be replicated on every job. Invest in your team members’ success so they’ll invest in yours.
What happened with our client? Within 18 months, he has four crews and only has to work 20 hours a week doing the creative stuff he prefers. The best part? It’s attainable for you, too, if you are willing to take the leap of stepping back to skyrocket your business growth.
Cofounder Easier Accounting & Real Business Owners. 20+ years of experience growing & running multiple businesses. Author & public speaker. Read Kale Goodman’s full executive profile here.
4 Missteps for Banks to Avoid When Migrating Payment Services to the Cloud Cognizant
Banks and financial services providers can realize the efficiency and cost savings of cloud-based payments by taking proactive steps to guard against these common mistakes, notes Rustin Carpenter, a Global Payments Solution Leader for Cognizant’s Banking & Financial Services Industry Services Group.
The cloud’s lure of simplification is a powerful incentive for payment providers, as its role enabling modernization and permanently switching off legacy applications. Where banks struggle, however, is in shaping a strategy to get their payment services to the cloud. By understanding the common missteps, banks can create a plan for payment migration that maximizes benefits while minimizing risks.
The pandemic was a digital tipping point for banks, forcing them to implement in just a few months capabilities that otherwise would have taken several years. Research published in 2019 found that financial services firms lagged in adoption of public cloud infrastructure as a service (IaaS), with just 18% broadly implementing IaaS for production applications, compared to 25% of businesses overall.
Now many banking leaders we talk with are taking a serious look at cloud-based payment services, motivated by the age and complexity of their core payment applications as well as their business’s growing confidence in the security of cloud platforms such as Google Cloud, Microsoft Azure and Amazon Web Services (AWS). As banks contemplate migrating payment services to the cloud, here are some common mistakes to avoid that will ensure a smoother journey:
1. Assuming the cloud is cheaper.
Cloud-based services are indeed less expensive to run — once applications and services have been migrated. To manage a successful payments migration, be aware of the costs along the journey. The cloud can be a heavy lift. While banks and financial services providers often consider themselves proficient at consolidation and rationalization, the extensiveness required for cloud migration frequently far exceeds the effort of previous initiatives. For example, we helped a bank reduce its infrastructure footprint by 25% and lower its total cost of ownership by migrating its applications to the cloud.
That outcome, however, required careful analysis of the bank’s application source code and development of a migration strategy and cloud deployment architecture, as well as assessing and migrating more than 800 applications over three years. Cloud-based services are more streamlined and less expensive to operate, but accurately budgeting for the upfront time and resources of a cloud payment migration is challenging due to the many unknowns. Careful attention to planning is critical for a realistic cost assessment.
2. Underestimating the amount of prework.
The cloud promises to reduce complexity but getting to that point takes a thoughtful migration plan that’s complete and doesn’t skimp on details. What steps will be taken to ensure there’s no disruption to clients? Which applications make sense to retain and manage in-house, and which can be leveraged as payments as a service? For instance, fund disbursements for a retail consumer bank that administers 529 plans are typically a low-volume service for which cloud automation is a great fit, replacing paper checks with significantly less costly cloud-based payments.
But when it comes to payments as a service, managing risk and ensuring value also come into play. Wire transfers might appear to be good candidates for migration to cloud payments, but if most of the bank’s transfers are for high net worth individuals with equally high customer lifetime value, then the transfers may require levels of personalized service best handled with an on-premise platform rather than in the cloud. A well thought out strategy that addresses all impacts and value opportunities helps bank leaders avoid the unintended consequences that keep them awake at night.
3. Failure to prioritize.
A payments migration needs to be phased in a way that provides strategic competitive advantage. Setting priorities is key. For example, a bank may choose to align its payments migration with a specific strategy, such as a planned de-emphasis on branch offices. Another approach is to migrate the costliest payment applications first. Some banks may reserve cloud adoption for when they’re ready to add new payments capabilities.
Each bank’s path to cloud payments is nuanced, yet there’s often a feeling among banking leaders that moving to the cloud is an all-or-nothing proposition. That is, payments are either entirely cloud-based or all on premise. A more realistic goal is to craft a migration roadmap for a hybrid environment that accommodates both types of infrastructure for the near future, and to then prioritize and phase the payments migration in a way that makes strategic sense.
4. Testing in a dissimilar environment.
Replicating legacy operating environments for testing is expensive, so it’s not uncommon for banks to settle on environments that are similar but not identical — though the variation often leads to production environment errors that can derail cloud migration efforts. Performance falls short of expectations, typically due to the tangle of payment applications resulting from years of mergers and acquisitions.
For example, post-merger banking platforms often utilize more than one legacy payment hub, and there’s little chance that a bank’s current IT staff fully understands or can predict the unintended consequences for the hubs when making changes to the platform. Don’t fret over creating the perfect testing environment. Rather, build an environment that’s as close as possible.
By avoiding these common missteps, payment providers can reap the benefits of a simplified, modern infrastructure and application environment and minimize the risks.
Rustin “Rusty” Carpenter leads payments solutions within Cognizant’s Banking & Financial Services’ Commercial Industry Solutions Group (ISG). In this role, he works with group leaders and client-facing teams to elevate Cognizant’s client relevance, industry expertise and challenge-solving capabilities. Over his career, he has developed deep and broad expertise in payments and the emerging alternative and digital/mobile payments arenas. He is a frequent speaker on these topics at conferences worldwide and serves as a board advisor to fin-techs in all areas of payments and fraud prevention/mitigation.
Carpenter most recently was Head of Sales & Service, NA for ABCorp. Previously, he ran the Instant Issuance business for North America at Entrust Datacard; served as COO for Certegy Check Services, N.A.; was General Manager, NA for American Express Corporate Services; and completed multiple assignments at Andersen Worldwide and Dun & Bradstreet. Rustin has a Bachelor of Arts degree from Denison University and an MBA in finance from Rutgers Graduate School of Management. He can be reached at Rustin.Carpenter@cognizant.com
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