Only about half of small businesses survive for 5 years.
All the sacrifice, money, and energy an owner sinks into a new business only gets them a 50/50 shot of not going broke.
Why?
There are many surface level reasons that a business doesn’t make it:
- lack of capital,
- changes in market preferences,
- economic downturns,
- and on and on.
But if half don’t make it, that means half do make it in the same market conditions. The difference is the owner.
Specifically, the difference is how the owner thinks about the business.
Most people who start a business are people doing the work who decide they can do it for themselves. The accountant starts an accounting firm. The hair dresser opens a hair salon. The chef opens a restaurant.
All too often, people who are good at doing the work of a business confuse that skill with the ability to build a business that does the work. They are completely different skills.
The Three Personalities of the Owner
EMyth has identified three personalities that every business owner embodies.
- The Technician
- The Manager
- The Entrepreneur
The Technician is the person who does the work. They focus on making, selling, and delivering the product or service. The technician believes they must produce more to earn more.
This is where most small business owners spend most of their time. The focus is on working in the business instead of working on the business. Remaining stuck in this mindset will greatly limit the business’ potential, and may well doom it to failure.
The Manager is the personality that coordinates and directs the work of others. They focus on figuring out how be more productive. They organize and systemitize so employees can deliver efficiently and accurately. The manager needs to be the bridge between the big picture and the execution.
This is the personality that tends to be most neglected by small business owners.
The entrepreneur is the personality with the vision. They have the big idea of what the business could be. They spend their time communicating the vision and inspiring others to buy into it.
This personality needs time and space to dream. Most small business owners never get that time and space because they are too busy being the technician.
Every owner needs a balanced mix of these three personalities. For the vast majority of small business owners, that means getting better at being the manager and the entrepreneur.
Getting off the treadmill
It is usually a technician that starts a small business. They know that they can do the work they’ve always done. The trouble is the technician rarely has a vision beyond getting the next customer or doing the next job.
This is just a recipe for getting stuck on an endless treadmill and inevitable burn out.
The goal for the owner is not to figure out how they can produce more. The goal is to figure out how the business can produce without them.
Can you see how that requires different thinking?
The path to success
By developing their inner manager, the owner can better leverage the efforts of others. The manager creates systems so the employees can do most of the technician work. With these systems working, the owner has the time and space to become the entrepreneur. This is how they can start to see what the business could become.
The manager’s systems are key to creating a business that isn’t dependent upon the owner. These are the secret to creating a scalable business that can grow well beyond the owner’s individual capabilities.
To get a better idea of how this might work, think about a franchise. Imagine creating 100 more businesses just like the current one that all need to work without you. You can see how this forces you to think differently about how the business works.
Whether you would ever want to franchise your business doesn’t matter. What matters is figuring out how to create a set of systems that allows the business to operate effectively without your direct effort.
The owners who can do this are the ones who prosper. They are also the ones who feel energized and fulfilled. Because the business can work without them, the owners can do the things that matter to them.
Wouldn’t you rather do the things that fulfill you than be trapped inside your business?
Erickson Business Coaching helps you get there. Contact us to talk about how we can help you get off the treadmill.