Many experts, such as Mark Tibergien, Forbes, FP Transitions’ Grau, have written about the difference between a practice and a business. Here are our list of differences from an operations point of view.
COO’S TOP TEN DIFFERENCES:
Practice is the repeated exercise in or performance of an activity or skill so as to acquire or maintain proficiency in it. VS. Business is making one’s living by engaging in commerce.
A business has systems. A practice does not.
A business treats staff and outside providers as one cohesive team. A practice does not.
A business works to automate and eliminate work. A practice does not and may even enjoy the busy work.
A business continuously improves the client experience to attract more clients with less effort. A practice does not.
A business actively monitors sales, gross revenue, and net profits. A practice does not.
A business owner can take a vacation and the business continues with no slow down. A practice’s owner can not take a vacation without slowing down business activity.
A business has a higher valuation. A practice has a lower valuation and might not have a value at all.
A business calibrates the staff as the business evolves. A practice does not.
A business continually invests in systems and people. A practice does not.
CLARITY and REALITY
This list comes from our years of experience working with many professional services firms. We have seen the inner workings of firms that look grand and yet, are floundering due to lack of clarity.
Don’t flounder. Don’t scorn those that give you a reality check. Instead, answer this one question with conviction and enjoy the success that clarity brings.
What do you want – a business or practice?