Hey there, Freedom Seeker! Welcome to the exhilarating big sky of small business entrepreneurship! I wrote a book for you. This book reveals the Unbiased Small Business Research Formula developed from decades in the trenches of American Main Street and online business as a small business entrepreneur and a coach. Its objective is to help you become the successful creator of the new life you envision by objectively guiding you in researching and choosing the right business. In the next weeks, I’ll share free sections of the book with you before it’s released for publication and available for purchase. CHAPTER 6- Where You Avoid Five Traps That Can Derail You. “If your business depends on you, you don’t own a business, you have a job. And it is the worst job in the world because you are working for a lunatic!” Before we jump into searching for the right business, let’s define what is the wrong business. We might think that a business that doesn’t make enough money is flawed by definition. That’s true, but there is more to it. Indeed cash flow is the blood flow of any business; without it, it eventually dies. But the root causes of a business failing financially often begin with the reasons the owners pick that model. There are five traps that can derail a new entrepreneur. Let’s just recognize them. Let’s debunk a common belief. That’s the belief that if you start a business from an activity or a hobby you are passionate about, you will be successful as an entrepreneur. This advice is flawed for most people unless you plan to expand later or don’t care about having more freedom and flexibility. Following your passion for a hobby or an activity you enjoy is not the best way to succeed with a business that will give you freedom of money, time, and location. The main issue with turning a passion hobby into a business is its contradictory purpose. Engaging in your passion is something you do for yourself. A business does things for others. You might love to garden, golf, hike, paint, race cars, ski, travel, etc. Ask yourself: what makes you enjoy your hobby? Is it because it relaxes you, de-stresses you, stimulates your curiosity, makes you feel grounded, or inspires you? Consider why you enjoy your hobby and ask if it will still be true when it becomes a business. Will you still feel relaxed, de-stressed, grounded, or inspired if you attach a profit and loss (P & L) statement to it? Turning a hobby into a business is a good way to ruin a hobby. If freedom is what you seek, your business needs to be scalable and generate income without your direct input as a revenue producer. Suppose you are a passionate artist and you want to start a business by selling your art. As the solo producer, you only have a few hours each day to dedicate to art making. If you are traveling, on vacation, or you fall ill, you are not generating revenues. In addition to creating art, you’ll still need to operate a business with marketing, lead generation, public relations, etc. If this realization brings a sinking feeling to your heart, don’t panic just yet. In a later chapter, we will explore with the RBRL formula how you can leverage your expertise to transform your hobby into a business that provides the freedom you seek. 2- Expert technician starts a business owner. There is nothing wrong with leveraging your expertise to start a business unless you create a job, not a business. Generally, solo businesses where owners are the only revenue generator don’t create scalable revenue streams because they are inherently limited by the hours a solopreneur can work. They became an expert from countless hours of practice at their craft, but now they are amateurs as business owners. Many small businesses are started by technicians and professionals who love what they do, are great at it, and decide they’ll be happier being their own boss. They soon discover that to have a life with balance while succeeding in business, they must give up what they excel at doing and step outside their comfort zone by embracing the demands of running a business. Being an outstanding technician or a professional in your field of expertise does not make you an outstanding business owner, which is the role you must embrace once you have a business. A consultant, a human resources expert, a sales executive, an engineer, a lawyer, a hairstylist, a yoga teacher, or a mechanic who spends their time working as a technician while they own a business creates a hazard to their health, wealth, and relationships. They own a job, an expensive one, not a business. Again, to have freedom and flexibility and to build equity over time with your business will require that you grow it by ensuring the business generates revenue streams without your direct input. In his book, “The E-Myth,” Michael Gerber calls this the Entrepreneurial Myth. There are a few reasons many of us resist, consciously or not, trading our expertise to run our business, even after we have invested time and money in creating and launching that company. A common reason is that it is humbling to descend from an expert status in our field of expertise to become a newbie in our new role as business owner. Psychologically it can be challenging. A mental switch must happen when an expert technician runs a business. It is not just about learning new skills in business management. It also means embracing a new identity as an expert in x, y, or z to the identity of a business owner and entrepreneur. Although that is a huge opportunity to grow, there can be an element of subconscious guilt that sneaks up on some of us when we don’t directly produce income in our business. That is the first obstacle to overcome as a technician turned business owner. The day you decided to leverage your expertise to start a business is the day you changed your identity. Even if you might initially start the business as the only revenue generator, eventually, if the freed-up entrepreneurial lifestyle is what you seek, you’ll need to replace yourself as a technician and focus on running and growing your company. At first, we might not be great at being business owners, and we’ll make mistakes. Making mistakes is how we become experts. As an entrepreneur, we must practice a growth mindset to overcome the fear of failure and to grow. In parts II and III, we’ll discuss how a growth mindset is your superpower as an entrepreneur. We’ll also examine how our expertise as a technician can be successfully leveraged with a freedom-yielding and purpose-driven business. A friend and former employee started a spa business. I was crushed when she left my team, but I understood her desire to strike it on her own. She was a gifted technician who loved to care for her clients. And her clients loved her back. A few years later, when she asked me to coach her in growing the bottom line of her beautiful spa, I inquired about the systems she had built in the business to manage her employees and create accountability for everyone, including herself. She said she was too busy working as an esthetician and didn’t have time for any of it. I pointed out that, now she was a business owner, any hour she was spending in the treatment room, she was not assuming her business responsibilities, which affected her bottom line. Even though it was work, she was indulging in her comfortable skills. To grow her business, she needed to hire, train and manage other technicians to replace herself, expand retail sales, create a marketing campaign, etc. Unfortunately, she liked having a business but hated running it. It became clear that stepping into her role as a business owner and delegating her role as a technician to others was too unpleasant. She decided to sell the business. It is a common story. I, too, struggled with this dilemma when I was a new business owner of my tiny spa studio. What saved me was my thirst for freedom and flexibility. I was keen on learning to become a better business owner and switched to a full-time business operator when I expanded to a larger location. Unless you have a career strategy for yourself as an owner, meaning you plan on scaling, loving your role as an excellent generator of revenues doesn’t guarantee that you will enjoy your role in that business. With any business you pick, you must learn to enjoy your day-to-day activities and embrace your responsibilities as its leader. Many individuals get pulled into a business because they “fall in love” with a product, under the misconception that a wonderful product is the sole recipe for business success. A great product is only one component of a business’s success. They “love” the product. Yet, no matter how authentic and delicious the Neapolitan pizza is, it doesn’t guarantee that the company will thrive nor that the business owner will be motivated to run it in the long term. Its appeal does not guarantee the prosperity of the business, nor does it assure the business owner’s sustained motivation to run the enterprise. The pizza you love so much will make you vomit if it burns money. Let’s face it. You could be biased and be the only one in your market prepared to spend money on a pizza that no one else can justify spending their hard-earned cash for. The pizza here is only an illustration; it could be any product. The point is that a product alone doesn’t make a business. A business is profitable when its product offers a solution to the problem of an identified market segment willing and able to buy the product at a price point that maintains business viability. The small business reports that 42% of the startups that fail succeeded in creating the product they intended to create, but their market was not buying it. In other words, they built the wrong product or picked the wrong market segment. 4- Too much money to invest. It might seem paradoxical to consider having a large investment budget as a potential pitfall in choosing the right business. Especially when it is your first business, and you are doing this independently and without an impartial, unbiased advisor or coach. You are at risk of making unwise investments or of being encouraged to buy a business that does not align with your strategic goals or the life you envision, and that will result in significant losses. When too much capital is available, it can be tempting to forgo the due diligence necessary to prove or disprove the viability of a new business idea, a business to acquire, or a franchise to develop. Rather than focusing on what will be most impactful, when money is readily available, there is less pressure to find creative solutions and operate efficiently, leading to waste and inefficiencies in the business. Additionally, having too much money can create complacency and reduce the sense of urgency that often drives entrepreneurs to work hard, make smart decisions, and stay brutally objective about their business choice. Other parties, such as well-intentioned brokers, franchisors, real estate developers, or, at worst, outright fraudsters, will be eager to relieve you of your cash. I speak from personal experience, having made costly mistakes in business, franchising, and real estate because funds were too readily available and my knowledge was limited. The risk when having access to too much money is falling victim to fake urgency and scarcity, and omitting the research, and due diligence, by compromising on the clear outcomes the business should deliver. By identifying your priorities and requirements with the RBRL, you will equip yourself with an additional safeguard against unsuitable investments. 5- Trading the devil you know for the devil you don’t know If you are considering quitting your job to start a business, you probably seek the types of freedom a job can’t give you. Maybe you’re at a point where you’re fed up with a daily grind that doesn’t compensate nearly enough for your precious time and the compromises you are required to make as an employee. Maybe you resent the time-vampire commute. Or the toxic office politics. Or business travel and time away from your family. You might have reached a point where every new job and new company is more of the same, and you dream of becoming the boss. The common trap you must avoid when leaving employment for entrepreneurship is of finding yourself in the same kind of entrapment but worse. Quitting your job to become your own boss doesn’t guarantee that you will find meaning in your business. It’s a common source of disappointment for new business owners who find to their great surprise that they are miserable with their day-to-day activities as owners. It is worse than being an employee because a job can be quit easily. Not so fast with a business. When this happens, the missing piece of the puzzle is the alignment of your livelihood, your business, your life purpose, and your ideal life, aka your LIFE+. A business can only give you what your job couldn’t if you pick the right business for the life you seek. This is why I am so glad you are here! With the Right Business Right Life formula, picking a business that can deliver the life no job can, is exactly what we will do in the next chapters. KEY TAKEAWAY: In this chapter, we examined four flawed approaches to starting a business that can derail an entrepreneur. 1- Starting a business from a passion hobby 2- Expert technician turning business owner and remaining a technician 3- Choosing a business because you love the product 4- Having access to too much money to invest 5- Trading the devil you know. It is vital to align your business with your life purpose and seek the types of freedom that a job cannot provide. It is crucial to avoid the entrapment of success and take the time to make informed decisions when starting a business. With a growth mindset and the right approach, you can build a successful and fulfilling business that aligns with your life purpose and delivers the types of freedom you seek. Well done on finishing part I of this book! I hope it gave you a panoramic view of small business and its potential to create a life you and yours will love. It is crucial to acknowledge the inherent biases associated with small to mid-sized enterprises (SMEs) as they cause many people to launch a business only to discover that they were led astray, while others who miss the chance to reinvent their story remain trapped in an unsatisfactory life and career. In part II, we will delve further into the eight milestones of the unbiased small business research formula of the Right Business Right Life (RBRL) approach to land you the right instrument for the creation of your life story. Would you like early access to your copy of the book as soon as it is released and receive a bonus book companion coaching session? During the private coaching session, I’ll guide you through the exercises and templates in the book. Available to the first 20 VIPs who purchase the book. To join the VIP waitlist, click here. Getting started If this is you…[Free Book Preview #8] ~ CHAPTER 6- Where you Avoid Five Traps That Can Derail You.
– Michael Gerber.1- Starting a business from a passion hobby.
3- We just LOVE the product
Joining the VIP Waitlist
Do you want greater freedom & income
from a business you own?
If so, you probably have a question or two about
starting a business from an idea or buying one.
A critical step is to build a business foundation for
success BEFORE you invest greatly.
Click here to book a no-cost consultation.
