Let’s talk candidly. Here are the facts of what you’re facing as a business owner.
Fact: Only 6 percent of U.S. based businesses gross more than $5 million per year in sales and employ an average of 6 people. (Source: U.S. Census Bureau)
Fact: 88.6 percentof U.S. based businesses still require the owner to be there to be the primary person responsible for core functions like producing their product or service, managing the day-to-day business, and managing the financial aspects of the business. (Source: U.S. Census Bureau)
Fact: The average privately held company in U.S. only grew by 5.4% in 2013 and for those companies with sales under $10 million, the average company only grew by 4%. (Source: Sageworks)
Fact: The average small business owner works 52 hours a week and 57% of them work six days a week, and more than 20% work SEVEN days a week! (Source: Wells Fargo/Gallup Small Business Index)
This is what you’re up against.
The average business grows slowly, and that growth is heavily reliant on the personal production of the owner.
I have a name for this challenge–the Self-Employment Trap.
This is when the business owner is so essential for the business that they haven’t built a company, they’ve built a self-employed job for themselves.
So what’s the way out? To build a business, not a job. This requires that each quarter you take simple steps to lessen your business’s reliance on you. You incrementally replace yourself from the key functions in your business with sound systems, strong team, and intelligent internal controls.
Notice that I’m not suggesting that you just “hire your replacement” to manage your business. This is a losing strategy that merely moves the critical dependency from your shoulders to those of your single key manager.
By systematizing the core functions of your business and having simple internal controls that help your team self-manage and your managers more effectively oversee, what you’re doing is you’re increasing the odds that your staff will be able to take on more and more of the key roles inside your company.
Rather than being reliant just on a person, you’re building multiple people. And rather than just throwing multiple people in as the solution, you’re empowering them with the systems and controls (i.e. structure) that will help them succeed and help your business make sure that the right things get done at the right times.
The Good News
I don’t want to just leave you with the depressing “facts”; I want to empower you with an additional set of aspirational facts as a motivating new reference to model.
Fact: Many small business owner (with companies under $25 million per year in sales) are growing much faster than the norm. For example, we survey our business coaching clients each year and over the past several years their average annual growth rate has been 32.4% per year. That is over six times faster than the average privately held company in the U.S.–and over 8 times faster than the average privately held company in the U.S. with annual sales under $10 million.
Fact: Many small business owners do successfully wean their business off of its crippling dependency on the owner’s presence working for the business each day. In one study we did with a group of 50 of our business coaching clients, they reduced their companies’ owner reliance by an average of 81.5% by putting a consistent focus on growth of their internal systems, team and controls.
Remember, you can grow your business without sacrificing your life. It’s not enough to just create growth, you’ve got to do it in a way that reduces your company’s reliance on you. This is how you sustainably grow your business the right way.
Also, to help you grow your business and get your life back, we just put the finishing touches on a powerful free toolkit which includes 21 in-depth video trainings on how to intelligently scale your company. To access this free toolkit click here. Enjoy.