- The New Rules with Alan Pentz
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- Build the Dream, Not The Prison
Welcome back to The Small Business Mentor!
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Let’s dive in…
“Build the dream, not the prison”.
This quote is what business ownership is all about.
It’s tragic to me how many business owners are trapped by their own companies.
Here’s why it happens, AND how to break out of it:
Initially, you wear all the hats.
But as your business grows, failing to delegate tasks and build a competent leadership team keeps you stuck in a cycle of overwork and limits your company’s potential.
Here are the three things to break that cycle and get on the path of building your dream… a self-managing company… rather than a company you can’t step away from for more than a few hours.
1. Focus on Growth First
The smaller your company is, the harder it will be to make it self managing.
Having a large company gives you more resources to hire quality employees who are capable of managing the business.
It’s much easier to hire administrative help to offload any tasks that you as the owner are doing that don’t directly focus on sales and growth.
I recommend offloading even customer delivery and relations to free up owner time for more selling when you are small.
Admittedly this is more risky but there is little reward without some risk.
2. Ruthless Pruning
As you grow, you need to realize that your management and/or leadership team is your most important asset.
Do not allow substandard people to remain on it.
We all do this. As companies grow, it’s inevitable that some number of your key leaders won’t be able to keep up.
You need to offer feedback and training but the reality is you’ll grow faster with better people.
If you wait around for substandard performers to improve, your business is stagnating.
3. Build Systems and Processes
Once you’ve grown the business to a place where you as the owner can’t be involved in most of the day to day operations, you need to focus on building high-quality systems and processes.
At first processes are ways to train other people to do things the way you would.
Over time groups of related processes form systems. As you grow each system: sales, operations, finance, admin, etc. will be overseen by a manager.
All the managers together make up your leadership team.
To become self managing each system needs to operated by a leader who can keep the system healthy and developing along with the business.
Those processes will go from embodying how you as the owner would do something to the optimal way for the company to do it. Ie the processes grow past you and your knowledge.
Your job at this point is to make sure the leader in each seat is the right one.
They give your business a chance to operate without your constant input.
4. Build the Asset
Once you have your leadership team in place running the systems of your company, you move into a different mode.
Now you are an investor and your company is an asset.
Your focus should shift to understanding the market in which you operate and allocating capital to your business or other investments accordingly.
In some cases that means taking money out of the business to diversify. In others it means buying other companies to enhance the value of your company.
Here’s a mindset shift that most entrepreneurs need to hear: Your business isn't your job.
Read that again.
Your business is a separate entity that should ultimately operate independently from your constant input.
To get out of the trap, you need to create your escape plan.
Grow.
Prune.
Systemize.
Build value.
Build a business that serves your life, not one that consumes it.
Remember, you started this journey to build a dream.
Don't let it become a prison.
Keep growing,
Alan
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