Do you own a business or do you own a job?
The answer to this question has a lot to do with what stage of business development you are in.
During the startup phase, you are wearing a lot of hats from service, sales, accounting, technician, marketing, finance and vision. In the startup phase, your business owns you; and it is during this critical time that your efforts, commitment, skill or luck will determine whether your business will succeed. Twenty-five percent of startup companies fail in the first year, 36 percent by year two and 44 percent in their third year.
So why do many well-intentioned, high-energy, optimistic entrepreneurs fail? Entrepreneurs often suffer from fatigue, bad advisers and the inability to perform the numerous roles required of ownership during the startup phase.
Early in my career, I was blessed with a gift from the CEO of the company I worked for. He handed me “The E Myth” by Michael Gerber. He let me know he was expecting me to read it and let him know what I thought. The book goes into detail on why small businesses fail and the distinction between working on your business or in your business. I read the book, and it became the roadmap I would use to build my company.
To own a business, you need to acknowledge before the startup phase that you intend to build a business and not a job. This decision will help guide you past the startup phase where there is no way to avoid all the roles you must play. Your decision commits you to replacing yourself, over time, in each of these roles.
I started my company 15 years ago, and on day one I owned every job. I knew to truly own a company, I would have to trust others to take on these roles, and I would need to work past being the business and toward building the business.
Here are a few questions to ask yourself about your business. Can your business operate without you being physically, emotionally and financially involved? Do you work more than 60 hours a week in your business? Would you or anyone buy your company? If you died tomorrow, would your business survive? Do you have any profit, salary or would you make more money working for someone else?
Your answers to the above questions can indicate whether you own a business or a job.
My goal with these columns will be to raise questions that many in business face and hopefully provide insight and resources to help you navigate through the various stages of your business.
People often ask me what the difference is between a successful entrepreneur and those who fail. My answer is, “Successful entrepreneurs acknowledge the hurdles to success and commit to getting over them, while those who fail, never see the hurdles or never truly commit.”
Richard “Gordy” Bunch is the EY Entrepreneur of the Year® for the Gulf Coast for Products and Services. He is also the founder, president and CEO of The Woodlands Financial Group based in The Woodlands.
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