Entrepreneur Advice: 7 Reasons for Reducing Your Company’s Reliance on You
Time for a little entrepreneur advice.
I started my first “real” business at age 23 when I dropped out of college to start distributing a nutritional product in San Diego, California. Until then, I was a semi-professional athlete training for the Olympics. (I played on the United States National Field Hockey Team for seven years.)
I was excited, ambitious, and ready to take on the world. That was until nine months later when I went bust.
What happened? I’d jumped into a business I didn’t understand and didn’t have a real passion for. I hadn’t even bothered to write out a business plan.
I’d never invested the energy to learn the skills needed to build a successful business. I was simply chasing after the glitter of easy profits.
That was my wake-up call.
They say the first sign of progress is admitting you have a problem—and boy, did I have a problem. I was scared, overwhelmed, and feeling stuck.
I didn’t understand how to sell or market; I had no skill in how to structure or run a business; and I had no clue how to manage cash flow and build financial controls.
I had let my ego-fed pride blind me to my own ignorance and isolate me so I didn’t look for the right mentors, advisors, and peer group to guide me.
Going bust helped me to break through my fear-based bravado and understand that I had a lot to learn. And learn I did.
I studied. I read. I experimented. I found mentors to teach me and partners to contribute their best talents. I paid attention and focused on learning the key skills that had eluded me the first time around.
The result? Seven years later, I was an “overnight” success—a multimillionaire with two successful companies and a bright entrepreneurial future ahead of me.
But now I had another problem—a serious problem. I was totally burned out and overwhelmed.
I was working 70 hours a week with lots of travel and meetings.
And if that weren’t enough, I was in danger of losing my passion for the business because of all the “details” I was responsible for overseeing.
Sure the money was great, but this wasn’t what I’d signed up for. I originally started my own company because I wanted to be in control of my own destiny. I didn’t want to work for anyone else (that is, if anyone else would’ve had me). But in the end, I wanted one thing more than anything else. In fact, this one thing was the single deep desire that had sparked me to open up shop. It’s what drove me to keep going when tough times hit.
I wanted freedom. Freedom from people telling me what to do and how to do it. Freedom to do things my way. Freedom from having my future depend on the whims or decisions of others. And—gulp—time freedom.
Instead of constantly working to feed my business and feeling trapped, I wanted to let my business work for me. The cash flow was great, but I always had to anticipate the pressures of the following month, with its payroll, overhead, necessary sales, and “emergencies” I knew I’d have to handle.
I wanted out of the pressure cooker, to escape the long hours and demands. Was it too much to ask for my business to support me instead of me working to support it?
It was at that point I made a decision. I’d build a business that would work without my showing up each day. I focused on it, obsessed over it, took action on it. And little by little, my business started to mature. I found key team members, built strong operational systems, and outsourced much of the day-to-day work.
What happened? Over the next 36 months, my income skyrocketed, but best of all, my free time kept pace. I had reduced my working hours to an average of 35 hours a week and increased my vacation time to two to three months a year. I was doing the things in the business that I loved out of choice, not obligation, because I’d crafted a role for myself in the company that was both sustainable and enlivening.
At this high point, I got such a good offer to sell the companies, I decided to do it. I took the money—along with everything I’d learned about building a successful business—and started fresh.
The reason I share this with you is simply to illustrate a point – it is not only possible to build a business that doesn’t rely on you, but that should in fact be your goal.
The real purpose of any business isn’t to make a profit, it’s to build a business that profitably creates value in the market in a scalable way.
In this article I wanted to hone your desire to do what is needed to succeed in this goal so you have the fuel to sustain you when the road gets temporarily tough.
Here are 7 reasons why it’s worth the time, energy, money, sweat, and tears to build a scalable business that is independent of yourself.
- It gives you control over your financial future.
No matter what economic conditions you face, you’ll have the financial strength that allows you to make the choices you want for you and your family. Plus, you’ll have the security that comes from having mastered the skill of how to build a thriving business. Should something happen to one of your businesses, you have the skills and experience to build another one.
- It will massively increase your net worth.
The average “owner independent” business is 10 times more valuable than its owner-reliant counterpart. Larger revenues mean your company will command a larger multiple, plus you’ll be a much more attractive target for a strategic buyer. Often your business will grow in value one hundredfold or more when you take scale it this way.
- Your business is much easier to scale.
By its very nature, an owner-independent business is much easier to scale. Over the past many years our average business coaching client has grown by 32.4 percent per year, and many of them have grown at 100 percent or more per year.
- You earn your freedom from your business.
It no longer depends on your presence every day to make it work. You have many more options available to you. You get to do the parts of the business you’re best at and love most, while letting other people handle the parts you don’t enjoy.
- An owner-independent business gives your staff security and growth opportunities.
The business isn’t vulnerable to something happening to you, the owner. And as you grow the business and reduce its reliance on your daily presence, you give your staff opportunities to grow and develop as business people as they take on expanded roles in a vibrant, growing enterprise.
In fact, all your stakeholders from staff to suppliers to vendors to investor to the people who rely on them, will be more secure.
- Your business is dramatically more stable.
You’re no longer vulnerable if one of your key team members—including yourself—gets hurt or has a life change.
- You have a greater impact on your market.
Because it’s now scalable, your business is able to create more value for your market as it sells and delivers your products or services to your customers and clients. These products or services improve many people’s lives.
So when you’re dealing with a thorny issue and wondering if it’s worth it to keep on keeping on, remember the above list and trust that the end goal is worth it. Plus, one day you’ll look back and romanticize the journey in a way you can’t fathom right now.
For more ideas on growing your business, including a free tool kit with 21 in-depth video trainings to help you scale your business and get your life back, click here.