Last week I talked with a few people that were looking to launch a new business.
Each of them had a good job and was planning on starting a side business.
They hoped to build up a client base over time.
The planned to jump ship from their job once their side business was earning enough money to replace their job income.
They gave themselves a timeline of three years to make the transition from job to business.
After I listened to them, I made the following comment.
It will take twice as long and cost twice as much to launch your business.
Growing a successful business is not for the faint of heart.
It takes gumption, faith, and persistence to create a successful business.
The time it takes to grow a business beyond the early startup phase to profitability varies with each person that starts the business.
Some people are able to grow a business to seven figures in their first year of business.
Other people struggle to break four figures in the same time period.
Starting a side business with the plan to grow it to replace job income is a solid way to get started with business ownership.
Some people have made the transition well to full-time business ownership out of the confines of a job.
The biggest benefit of taking this approach to launch a business is reducing the financial demands on the business.
When someone goes into business full time, the business is completely responsible for the personal income of the business owner.
Consequently, one of the first milestones of business success is creating enough money to pay the owner’s salary.
While this milestone seems like a no brainer milestone, it has been surprising for me to learn how many businesses struggle to pay the owners an adequate salary.
Often, the employees in the business are making more money than the business owners.
Other times the business owner literally is paying money to the business to keep it afloat.
It’s a backward way of running a business.
If the business isn’t creating enough revenue to pay the business owner an adequate salary, then the days of the business are numbered.
Notice I said days. I didn’t say months. I didn’t say years.
The business is on life support when the business owner is not adequately paid.
Inadequate owner salary should be seen as a grease fire in the kitchen.
A grease fire should be extinguished immediately.
Waiting to put out the grease fire will quickly lead to engulfing the kitchen in flames.
Once the kitchen catches on fire, the house will soon be consumed by the fire.
One thing is certain about growing a business.
It is not easy.
If it were easy, everyone would be doing it.
What is it about growing a business to profitability that is not easy?
Many things are difficult about business ownership.
The biggest reason why business ownership is difficult is that for many people, business ownership is new.
Very few people learn about what it takes to run a successful business.
Our education system doesn’t do a good job teaching people about business ownership.
Some people claim that this is a shame.
However, the role of our education is to educate.
Very few people in the education system have ever run successful businesses.
Consequently, they don’t know what it takes to run a successful business.
Furthermore, they can’t teach what they do not know.
Business ownership is kind of like swimming.
Much like swimming, you can’t learn to run a business by reading a book.
The only way to learn how to be successful in business is to run a successful business.
This may seem like a chicken and egg situation where the question becomes, “Which comes first?”
How does one become a successful business owner without the proper knowledge?
By trial and error.
Most things about business ownership are new.
In the beginning, business owners may be skilled at the work they performed while they were in someone else’s employ.
However, those skills that made them successful in a job are not the same skills needed to grow a business.
The skills to grow the business need to be learned, developed, and mastered.
As with most things in life, developing the skills is difficult in the beginning.
Over the last twelve months, I’ve watched my two-year-old daughter Zoe learn how to walk.
Zoe has fallen on her face many times.
Crying ensued as we brushed the dust off her.
Then Zoe got back up and started walking again.
I can only imagine the frustration she felt as she watched her two older sisters and brother run around with grace.
Zoe’s siblings don’t even have to think about walking. They’ve mastered the art of walking.
Zoe continues to fall down occasionally. However, now, the time between falls has expanded.
The point of sharing the story of Zoe learning how to walk is business growth follows the same principles.
As people grow businesses from one level to the next, they have to develop different skills.
In the beginning, they will not be good.
Because they are not good, it will be difficult for them.
However, with persistence, faith and gumption, the skills develop.
As business owners develop their new skills, things become easier, and growth occurs.
It’s a natural progression that growth must first occur internally before the external growth is seen.
If the business owner wants their business to grow, then the business owner must become better first.
The business owner must become better before the business can become better.
Once the business becomes better, then it will see growth.
Each time one goes through one cycle of improvements, things become easier.
In order to get to the next level of growth, one must enter a new cycle of improvements.
It is a continual process of incremental improvement.