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. In fact, you enjoy handling the sales, because you like your clients and they like you. In fact, they like you so much, they often ask if you can provide additional solutions 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 over these projects to your team to execute. In most cases, they don’t have the same deep level of expertise as you, and most of the time 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 are understandably not as confident as you are, and the consequence is the client doesn’t feel as secure with them. The client doesn’t think your team completely understands them, so they want to work with YOU – the owner. 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 this is you?
- Your vacations… don’t feel like vacations. If you spend your vacations dispatching orders from your mobile, it’s time to cut the tether. Start by taking one day off and seeing how your company does without you. Build systems for failure points. Work up to a point where you can take a few weeks off without affecting your business.
- You know all of your customers by first name. It’s good to have the pulse of your market, but knowing every single customer by first name can be a sign that you’re relying on your personal relationships as the glue that holds your business together. Create a plan to begin replacing 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.
- You get cc’d on more than five e-mails a day. Employees, clients, and suppliers frequently cc’ing you on e-mails can be a sign that they are looking for your approval or involvement. It can quickly become overwhelming. Start by asking your employees to stop including you in the cc line. If they really need to make you aware of something, ask them to add you to the “to” line – and only if they need a specific action from you.
There’s another 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 escape 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.
Owning an asset you can sell in the future is a magnificent feeling. Even better is falling in love with your business again at the same time. The way to feel confident and secure as you build your business isn’t just by working harder and it’s not by using willpower and grit.
These are the 6 areas to focus on as you increase the value of your business. Think of it 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.