When we start our business, we want the freedom to run things our way. To decide what we do, when we do it, and how. But over time, as your business grows, you may fall into the “owner’s trap” and here’s how it happens:
In the beginning, you have lots of energy (and lots on the line) so you do most of the selling. But that’s ok because you enjoy the sales – you like your clients and they like you. In fact, they like you so much, lots of times they ask if you can do additional things for them and you say yes because you want to keep them happy. And besides – revenue is revenue!
The problem becomes evident when you try to turn this new work over to your team to execute. In most cases, they don’t have the same deep level of expertise as you, and they don’t have all the context either because they weren’t present when you said yes to the client. So they’re not exactly sure about the details. What did you promise them? Your team wants to do a good job and they try their best but when they ask you questions about the deliverables, your answers often leave out important information that you don’t even realize you need to explain.
Then when your employees interact with your clients, they’re not as confident as you are, and consequently your client doesn’t feel as secure with them. The client doesn’t think your team completely understands them, so they want to talk to YOU – the owner. Especially when things go wrong. You can’t extract yourself from the day-to-day, which is what you need to do in order to think about strategy.
If this sounds familiar, there is nothing wrong with you. Entrepreneurs are high achievers by nature. We’re wired to do whatever it takes to succeed. The same traits which help us succeed also lead us to believe there’s something else we should be doing. Then we overpromise – and we overwork.
We forget the purpose of owning a business is not for us to do everything. The primary purpose of owning a business is to add value to the world and create an asset that works for us. But when we are in the “owner’s trap” what we really have is a job. And the worst kind of job, because we can’t leave it.
How do you know if you’re in the “owner’s trap?”
- Your vacations: If you spend your vacations connected to you business by your phone, it’s time to break that habit. Begin to build systems and solutions that can run without you.
- Your customers: Do you know most customers by first name? This is usually a sign that the reason the customer buys is because our personal relationship with them, rather than our company’s solutions. Since we can’t clone ourselves, this is part of the trap. Create a plan to replace yourself by hiring a sales team, and have a trusted employee shadow you when you meet customers so over time your customers get used to dealing with someone else.
- Your emails: Employees, clients, and suppliers including you as a cc on lots of emails is a signal that they want your approval or involvement. It can become completely overwhelming. Start by asking your employees to stop including you in the cc line. If they really need your input, ask them to add you to the “to” line – and specify what they need.
- Your sales: Your business doesn’t have a robust sales pipeline and a process for prospects that a sales team can manage so when you’re away, new business dries up. Begin to streamline and standardize what you offer, then hire sales people to sell your solutions. If you can’t teach a good salesperson how to sell your solutions, then chances are they are too complex or customized which means it will be difficult to scale, keeping you stuck in the owner’s trap.
There’s another important aspect of the owner’s trap: we work so hard that sometimes we resent our business. When this happens we can slip into the habit of treating our business like an ATM instead of an asset. We take money out to fund our lifestyle thinking we deserve it. Or we try to escape the business by “buffering” with food, alcohol, Netflix, etc.
So how do you get out of the owner’s trap? Begin by treating your business like an investment and turning it into an asset. Investing in your business is the best investment you can make because unlike the stock market or real estate, you have control over its value.
When your business is an asset, you’ll never feel trapped by it again. You can scale it, sell it, pass it down or take on the chairman role and become an investor removed from the day-to-day. Owning an asset like that is a magnificent feeling, because you have options. You’re confident, secure and free.
It doesn’t have to be hard, and it’s not about using willpower and grit. These are the 6 areas to focus on – think of this like the Cliff’s Notes for turning your business into an asset that you love – and other people want to buy:
- Mindset: Decide to love your business and manage your mind
- Focus: Narrow your niche, add more value, and differentiate yourself in the market
- Strategy: Turn services into solutions that scale and simplify your systems
- Money: Generate recurring revenue and get paid in advance
- Numbers: Set written goals, know your numbers and monitor key metrics
- Freedom: Replace yourself, reduce dependencies, and hire a sales team
Start now to implement these steps. It’s the fastest way out of the “owner’s trap” and will give you what you want most of all as a business owner: time, money, and freedom.
Best of all, you already have everything it takes to succeed: your business and your brain.