Business Owners, Take Back Your Life and Eliminate Worry Over Whether You Will Have Enough to Retire on.
How familiar does this scenario sound? You started your business because you had a vision of helping others while helping yourself succeed financially in the process. Along the way however, you got lost in the business and now the business started running you! What fulfilled you both personally and financially has faded into either boredom or chaos? The following three behavioral hacks can help you as a business owner redirect your focus and make marked improvements in your current state and more importantly help you shatter the business plateaus you have failed to break in the past. Be warned, these hacks are more akin to skills that can be learned and easily adopted if you possess the desire to not just make it but to thrive. But first, a little background on business ownership is in order.
According to US Census data, over 500,000 businesses are started each year in the USA. Nearly all of those businesses project revenues of over $10 Million by year 10 but fewer than 1% get there. 95% of businesses never break 1MM in revenues and that 85% of business owners do not have an exit strategy that they can convert into financial freedom in retirement. Worse still, most business owners started their own businesses to create a lifestyle, however, they have created a complicated monster that tends to eat up all their time and is not why they started their own firm in the first place. Worst of all is that 25% of those businesses started don’t last a single year and more than 70% fail by year 10! The statistics don’t lie, starting and running a business is hard. The probability of making it a huge success is extraordinarily low. Running my own firm in the heart of the Silicon Valley where it seems like everyone has their own successful tech start up is hard because we only hear about the successes and we fail to pay attention to the numerous failed business lying at our feet. I cannot guarantee financial success by adopting these behavioral hacks, but I can promise they will help you avoid a great deal of the sad statistics listed above.
Hack Number one: create a business plan and track your progress to it.
We all know that to start a business and secure capital, you need a business plan. But what about a business that is already a going concern? Do we really need to have a plan since we already know what our customers want? The answer is a definitive yes! A study found that companies that plan grow 30% faster than those that don’t plan. Sure, companies can have success without planning, but those that do see more success and likely faster with more certainty. To reinforce the connection between planning and fast growth, yet another study3found that fast-growing companies—companies that had over 92% growth in sales from one year to the next—usually have business plans. In fact, 71% of fast-growing companies have plans. They create budgets, set sales goals, and document their marketing and sales strategies. What does it take to do this effectively because it isn’t just enough to have a plan? You need to have a great plan that will differentiate you in the mind of the customer and deliver value in a way that is distinct to the customer. It takes a shift in mindset by the business owner from being at tactical leader to a strategic leader. The business owner must shift from what business writer Michael Gerber calls working on the business, not in the business. This is by no means a subtle shift. It is a massive shift that requires massive discipline and action. It all starts with analyzing every aspect of your business and how you deliver value. A business plan and a changed attitude is insufficient. The strategist will spend time learning what the customer wants and delivering a superior solution where a tactician spends time trying to close the next deal.
Hack Number Two: Focus on your sales story and building your team.
Henry Ford was famously quoted, “No one has a job until someone sells something. “This adage is one of the greatest truths that the small business owner often forgets. Selling is a difficult task for most people. The sales process is often imbrued with frequent rejection and one of the least desirable jobs in a firm. The company Marketing Wisdom’s survey shows that 95% of salespeople give up after 4 rejections but statistics show that on average salespeople need to hear 8 no’s before they get a yes! What’s worse, is that 44% of salespeople give up after just one rejection. That is not sufficient to grow anyone’s company to over $10mm in annual revenues. So, what is your sales story? Sales guru Mike Weinberg in his book “New Sales Simplified” talks about developing a sales story that everyone in a small business should learn. It tells who you are and what you do in a simple manner. It starts with defining the problem your clients face (their challenges) and then how you help them solve those challenges and finally the results they can expect. This sales story should be very succinct and learned by everyone in your organization. As a business owner, your sales team and message starts with you. Spend the time developing it, take the information you learned as a strategist in the paragraph and craft a sales story that addresses and solves the challenges your customers are facing. Sales are the lifeblood of a business. Another thought leader in the sales space Grant Cardone says that the number one reason for business failure is that “their ideas weren’t sold quickly enough, in quantities great enough at prices high enough to survive.” If you want to scale, then you must have your sales story in place and make everyone on your team memorize it and build your salesforce.
Hack Number Three: Develop Processes and procedures for all your business processes
As a business owner, ever wonder why you can’t take a vacation or why you can’t take a break from the business? The answer is simple, the business is running you, you aren’t running the business. There are basically three core building blocks of developing a business that has actual value according to Stephanie Bogan. She says real businesses that can be sold focus on People, Processes and Platform. If you don’t have processes in place that are defined and repeatable and can be easily taught to your people, you will always suffer as a “solopreneur.” Building a business that will outlast you the individual is essential to having the business thrive. The only way you can get other people to do things your way is to document it and train them. Some quick hacks to building processes can be made easier by using process mapping tools and templates like the ones available for free in Microsoft office. These tools can make the process easier and the visual nature of the information presented easier to understand for your employees. Create these process maps for everything from sales to delivery of your product or service.
An example of a visual process map
By developing processes, your employees can run your company when you leave and you can take back your life.
So how do these three hacks help you take back your life and eliminate worry over whether you will have enough to retire on? If you build a strategic plan and execute on it, you will always know what you are doing and where you are going. If you build a solid sales story that addresses the challenges of your client and how you solve them and teach it to your employees, you have developed a force multiplier effect that will grow sales. Finally, if you develop processes and procedures that become institutionalized, then you can leave the business, take a vacation and not worry about returning to utter chaos. As you spend time working on the business and growing sales, your earnings as a business owner will grow and we will discuss why you will be able to retire comfortably in my next post. Until then, Thrive On.
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