As we continue to our lead up to our Top 12 Business Mistakes Workshop, we are outlining major areas in business that owners make mistakes. Our first post in the Business Mistakes Series was on how too many small businesses are “Letting Customers Run Their Business”. Another very common mistake that we see is business owners working far harder and longer than they have to and for far less than they were making, or could make, working for someone else.
If you have started your own business, you have been there. You find a a new business you want to start. You invest long hours getting it off the ground and getting things going. You are inspired, motivated and committed. You understand and accept that getting this business going could require long hours and an initial financial investment. For many, we replace planning and patience with passion and eagerness and begin our journey with no clear plan, other than with a mantra of “do whatever it takes”. This approach will often plow through most initial barriers new owners face, but eventually reality will catch up and bog you down. If you have ever seen a professional tractor pull competition you can easily understand the analogy I am about to make.
In a tractor pull competition, competitors line up and race to see who can pull the weighted sled the furthest down the track. At the beginning of the pull, the majority of the weight is at the back end of the sled. However, once the race starts, this weight moves to the front of the sled till it eventually keeps the tractor from going any further. The strategy of the teams is to put forth enough power and energy to get as far as they can down the track before the weight catches up to them…because it WILL catch up with them. To accomplish this, these folks don’t use just ordinary, farm variety, tractors. These monsters often include 8-12 separate engines tuned together producing 1000’s of horsepower. I have even seen some run off of fighter jet engines! Needless to say, there is absolutely no shortage of power and potential in these tractors. However, no matter how much power or pull they have…the weight of that sled catches up and keeps them from going any further. For many small business owners, they start their business and approach the decisions and operations of that business as if they are competing in a tractor pull. They throw all the horsepower they have into getting that business going down the road. Only in their version of the tractor pull, they believe they can outrun the weight on the sled. Or even worse, trick themselves into believing the proverbial “weighted sled” doesn’t’ exist.
The result of doing this is these owners end up running a business that was never originally designed to make them money. They put in place a business plan that initially included them getting paid very little, or not at all. While this may sound noble and necessary to help minimize start up costs and reduce running overhead, what would you imagine the end result is…especially if the plan was executed perfectly? Answer: You get exactly what your plan called for, a business that was successful in paying you very little or not at all! A business owner has to make their physical and financial freedom part of the plan, or else it simply isn’t going to work or be worthwhile. After all, isn’t physical and financial freedom the universal reason most of us got inspired to take the plunge of small business ownership in the first place? Why would any of us take on the risk, burden and challenge of starting our own business if it isn’t to, at some point, have it start working for us. Our businesses should provide resources to fuel our passions and purposes in life more than working for someone else can do.
Regardless of what the ripple decisions may be to make it happen in your business, you must create a manageable schedule and pay yourself accordingly. If you are unable to create a business that allows you to work a livable schedule and pay you as much, if not more, than you could working for someone else, then you need to reconsider your business plan and long term goals. I say that statement out of compassion, not criticism. If we are smart and courageous, we all have to measure things we are doing in life and choose to do more of what is working for us and do less of what is not. Such an exercise is rarely easy, but it can make the absolute difference in significant progress in life and many lost years and dollars.
In closing, like most problems facing small businesses, this problem is serious, avoidable and one that just about every business faces at some level. However, it still is not one of the Top 12 Business Mistakes affecting owners today. Stay tuned as we outline more common small business mistakes, and make plans to attend our signature Top 12 Business Mistakes Workshop to see how you can identify, fix or avoid the biggest mistakes facing businesses today.