Flourish: How to grow without losing yourself
I have no time. If I don’t do it, it just won’t get done. It seems like it’s all on my shoulders. I just can’t escape from it all. If I want this business to work I have to do it myself.
Your company has a footing, it has customers and revenue. You're happy – almost. You feel a sense of vision because you didn't lose track of why you began this endeavor in the first place. Or something inside of you is saying things are not what you had thought they would be when you got here.
Are you getting what you want from your business?
You want to grow; you want to affect more change, to acquire more customers and to expand your offering. So, what do you do now?
Well, there are really three big mistakes that owners of small to medium sized businesses make in terms of growing their companies. It is all about balancing money and meaning. The attention may be on the financials but if the mindset is not in the right place things will just not happen.
Successful business owners are effective in separating their vision for the business from their personal hopes and dreams, and this ability extends to the business owner's ability to deal with money as well.
Successful entrepreneurs protect their mindset, and ability to grow, by always doing three critical things.
- Pay themselves before reinvesting in the company
- Not expect the company's growth to pay for itself
- Look for investor's money only after all other options have been exhausted
This stage is a key point in time for any business to continue growth in a manageable and meaningful way.
Let's breakdown the three reasons for how a successful business owner is able to maintain their original vision and sense of self in spite of challenges that would normally derail a comparable business at this stage in development.
Pay themselves before reinvesting in the company.
If your basic needs are not being met (meaning does your business pay you for your time), there is a strong chance that your decisions are not being made from the best possible point of view. And, in which case, the quality of your decisions will undoubtedly suffer. This is caused by,
- Over anxiousness
○ Continually reinvesting dollars in hopes that the business will grow to a point where one day the founder will have the ability to pay themselves is a bad approach. This situation does nothing for the business and worse, nothing for the founder, except for creating an increasing stress which is bound to generate ill informed decisions. If your business can’t pay you, you don’t have a business.
- Lose your vision if faced with survival
○ Further, where a founder is overly focused on simply surviving, business and life decisions will be made from this perspective, one that is most certainly not grounded and informed. As we discussed earlier, a solid vision for the future is an incredible tool to track deviations, changes, and decisions to the plan. Without the founder's basic needs being met, vision becomes a very low-priority. Without vision, your business could become lost and turn into something you never wanted.
- Lose confidence
○ Waning confidence, again, does nothing for the business or the founder. Confidence gets lost when a founder doesn't pay themselves. You feel you aren’t worth it. You think you don’t have value and that wears away at your sense of identity and ability to make sound decisions.
It is critical that you see yourself as more important than the company at this point, because the company cannot live without you, but you can definitely live without the company.
Rolling the dice for a bigger payout later, rather than paying yourself along the way is not worth the risk and effort.
Remember, you win by being a personal success; your company is an element of that win. It's not the other way around. Your success is not an element of the company's success.
Do not expect the company's growth to pay for itself
One of the major mistakes that many entrepreneurs make is assuming that their growth will finance itself.
Looking to market research and business intelligence insights on this matter can be very important to determining a business's market position and the average growth of companies within the sector, for comparisons sake.
Should a company have a desire to grow faster than its competitors, a solution is needed that provides a unique and differentiated offering to the market to make this happen. But this is rarely done and hope is usually the strategy followed … or bravado. We hope this will work or we know this will work because we think it will. Without question, it is best to apply a deeper critique to that solution, question it further to stir up a few extra contingencies and perhaps recalibrate the thinking used to arrive at that solution.
Some of the main reasons why a company should not expect it`s growth to pay for itself and how failing to realize this could lead to deeper, vision issues further down the road, are as follows:
- Creates a very stressful situation, where decision quality can be compromised
○ Endeavoring to grow is a hope not a sure approach to increasing revenue. Attempting to finance growth with the revenue from the growth is a mistake made all too often which leads to short-short term thinking. Decision quality suffers from the added, unnecessary stresses.
- Initiatives rarely go as planned
○ If a growth plan fails to generate any new revenue or at the levels hoped for, the company could be stuck paying losses, crippling vision once again. A company should always plan for contingencies and where possible, assume that forecasted growth will not pay for itself.
- Heightens pressure for initiative to succeed
○ There is no assurance that the growth initiative will ever pay off, let alone in the short term. Innovation is key to growing any business, but it must not be pursued at great risk put under the pressure to perform. Decisions will take you off track to keep it all together.
Don't seek investors immediately
- Give up independence
○ Where people invest, people want a say — and rightly so. Business owners at this stage need to ask themselves if they're willing to give up their decision autonomy for the investment dollars. If they decide investment dollars are a good idea, they need to try and make sure that the money is on their terms, so that future decisions match their original vision.
- Lose your long term vision
○ A complication of taking on too many investments is the demand investors will surely place on the founder. Taking on too many investors is as good as selling, except the founder is still stuck with their company — essentially working for investors.
- Spend too much time focused on investors instead of business
○ Naturally, once a company has taken on enough investors, its investors are going to want, at least, a quarterly report on performance. Many entrepreneurs at this juncture are forced to spend their time pitching for new dollars and compiling business performance data. They lose focus of their business vision and personal goals.
It is too easy for a company to get completely sidetracked at this stage.
Money is such a polarizing issue, especially where investors are introduced and employees are taken on. To keep the company going, it is ultimately up to the founder to maintain a sense of that original culture and vision.
A successful entrepreneur knows to pay themselves before reinvesting in the company and doesn't expect the company's growth to pay for itself. The first thought of growth should be considered in close relation to protecting the vision and maintaining your life.
Taking and applying these tips, in addition to constantly reassessing the meaning of your work, the reason you got into business in the first place and recalibrating your vision will put you, as the founder, on the right path to leading a successful, independent company on your own terms.
Flourish: How to move beyond an owner-reliant business is a three part series focused on the growth of a successful business from the early, idea stage to the fully-independent, large-scale company while balancing smart business moves with a healthy founder mindset.
Part 3: How to achieve your potential
By Michael DeVenney