I find it interesting that the vast majority of people who go to school to get MBAs are the least likely to start and build a business from the ground up. In fact, those who get MBAs are likely on a path to run an established company or build a career in the C-suite, not become entrepreneurs. Why? because it's freaking hard!
The stats don't lie:
- Less than 4% of businesses will ever reach $1,000,000 a year in Topline Revenue
- 80% of businesses fail in the first 2 years.
- Less than 10% of businesses will make it to 10 year
- 80% of the businesses that sell in this country sell for less than $1M dollars
Most of us get into entrepreneurship 1 in 5 ways:
- Born into a family business
- 7-10 years working in an industry
- Go Bang our heads against the wall until we figure it out
- Find a mentor
- A combination of all 4 above
So if most of us are winging it, what is it that those who successfully scale up do, verse those that give up, quit, or never get started?
Entrepreneurs who get stuck, in the day-to-day are the ones that always fail to scale. If you can't step away from the business, or leave without the business falling apart. Then you don't have a business. You have a JOB!
There are lots of really good salespeople running around with, strong teams who call themselves entrepreneurs, but sadly are not. When it's all said and done, you can't sell a job. But Business builders understand that they are building an asset that can be sold in the future. Therefore, entrepreneurs who are built to scale, spend every day trying to replace themselves and climb their own corporate ladder.
These business scalers, understand that you first have to build a company before you can enjoy the benefits of owning a company.
Ryan Holiday's book, The Obstacle Is the Way: The Timeless Art of Turning Trials into Triumph shows us that difficulty can be an opportunity to reach our goals and create success out of seemingly insurmountable obstacles. For a business builder here are the 4 biggest obstacles to scaling:
- Time: For every second we spend working in the business, we are losing time to invest in the business. The only way to solve this obstacle is to hire talent.
- Talent: If I hire 2 people who are 80% as good as me, they will still produce 60% more than I ever could, granted I have the right duplicatable processes and systems in place.
- Process & Systems: Scalable processes are duplicatable, repeatable, and shared by all. When documented and leveraged, they can be enhanced they can be augmented with Technology, allowing us to go faster.
- Speed: The first type of scale is horizontal. Meaning more people are all following the same system, allowing you to hire and train faster, in order to deliver on production.
- Margin: The second form of scaling is vertical. This is done by optimizing the margins. This occurs when operating costs become fixed, and production for each individual increases, in order to increase revenue per headcount, in turn freeing up more cash to push back into the business by way of marketing, technology, etc. to further enhance the topline
As we enter into the end of the first quarter, I encourage you to audit your activities in the business. Each day should be spent working on short-term problems, i.e. working IN the business, while building towards a long-term objective, i.e. working ON the business. Don't let the entire year pass by, without working intentionally on your 10-year vision.
✍🏽 Articles From Our Team
Health + Fitness
- Ep. 15 Luke Coats | The Blueprint To Business Success
- Ep. 14 Tim Jordan | A Mind For Business
- Ep.13 Clay Caldwell | From Dead Broke to Serial Restauranteur
- Ep.12 Andrew Rauch | Trusting the Process
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