Do You Think Like a Business Owner or Entrepreneur?
The Employee Scenarios Defined
Several events recently occurred with client businesses that have made me take a step back and really try to understand why business owners make some of the decisions that they do! For nearly a year I have been advising one client to put better employee systems in place. Well, it’s finally hit the fan! A key employee left for more money after another employee had some health issues. Now everything has nearly come to a screeching halt as a result.
In another case, while assisting a client to determine the size their company needs to grow in order to get to the business to a self-sustaining state the owner said revenue had been beyond level before. His heart sank in that instance. He realized he had been where he needed to be, but had not made business self-sustainability an objective. So, the right hires didn’t happen to free himself from the business.
You probably think you see the flaws in both scenarios. But, do you really understand the psychology that cause the flaws to occur? This takes a little deeper look in the mind of a business owner.
The Psychology of Bad Decisions
First, you must understand that at the root-cause in both these scenarios owners made the same mistake. They approached their business as an income source and not as an asset that would generate income for them and their employees! That is, they were just looking at it as a paycheck and making some extra money if they could and not like an investment that could continue generating income for them. THIS IS NOT A GOOD DECISION!!
Now, I know what many of you will say, “but Dino, I love what I do and I never want to retire!” I didn’t say you had to retire. I said, build your business like an asset so it can pay you whether you’re there or not! That means your business creates cash flow by itself (self-sustainability), NOT you come to work every day and work to create cash flow!!!
The reason most small business owners don’t think this way is because nobody ever told them you could build a business that way! Most business owners start out by getting tactical advice from someone they know that owns a business themselves. The problem is that most of these business owners really just own their own job too. So, the new owner is just getting bad information from the wrong resource!
Most small business owners don’t start thinking about creating self-sustainability until it’s too late. This is usually one day when they’ve finally decided they’ve had enough and don’t want to work anymore. The problem is a problem we address in our eBook “The Missing Component to Successful Entrepreneurship”. What they end up building is just a job and it has no real value. So, they either can’t leave or find someone like me who tells them it will take us 3 – 5 years to get it where you need it!
When you build business self-sustainability everything doesn’t rely on you or a key employee. So, when a problem rears its ugly head, it’s not as big an impact. You don’t have to drop everything in order to handle the problem. If you are the business, then your cash flow stops while you handle the problems.
If you build your business for self-sustainability, when you have finally had enough then you can sell the business and it has real value so that you can really retire. Or better yet, if it’s already supplying you enough money to retire on and you don’t have to be there to run the business, why would you want to sell such a great investment? Bet you hadn’t thought about it that way before!!!
Most of our clients are building toward this second scenario. Want to know more about how you can get there? Send me an email, I would be happy to share the simple formula that will turn your business into an on-going revenue stream and legacy for you and your family!