The Entrepreneur Evolution
Why did we all go into business and become an entrepreneur? Do you remember your reason? I bet it’s similar to everyone else’s: We did it for the freedom, to be our own boss, to have no one else “telling us what to do,” and, of course, to make piles of cash.
Or so we thought …
That was our mindset, and we jumped headfirst into our shops and our businesses only to find out our understanding of our profit-and-loss statement was wrong—just because it says we made $10,000 this month doesn’t mean that we have $10,000 in cash this month. We didn’t realize that our principal payments don’t show up on the P&L; only interest does. We didn’t understand that payroll taxes would be on top of every employee paycheck, or that employees would want benefits. We didn’t understand just how many customers would want things for free.
And, above all else, we didn’t—couldn’t—imagine that it would be this freaking hard.
We went into business with a lifestyle in mind as our goal. We’d work part-time with full-time money, and it would seem like little to no responsibility compared to our nine-to-five jobs we just came from.
But we found the opposite. We had to work twice as hard for half the money and twice the stress.
So, why was there this great disconnect for us all? And what snaps us out of it?
The problem falls on the mindset. We go in thinking that we can sell our time and our expertise, instead of honing in and selling results. This understanding causes us to sell the one thing we have plenty of at the beginning—our time. We find ourselves working late nights, just to make sure we can put food on the table, pay rent, pay bills. The only thing we feel we have to offer is our time and labor.
This gets ingrained in us. And trust me, it’s not just our industry. This goes for any small business person in any industry. If you start out and don’t have cash to offer the marketplace or enough product to offer the marketplace, the one thing you can sell is your time. Then it becomes habit, and when it becomes time to actually get results, we can’t get out of that trend; we’re caught in a rat race for the money and never able to become the entrepreneur we want to become.
So, let’s back up a second: Who should we be as entrepreneurs in our industry? An entrepreneur needs to be the person who can connect the customer to the salesperson to the technician to the parts hours, making all those connections but not doing the actual work at each step. In the beginning, we might need to do one of those positions (as a rule of thumb, I often advice that shop owners work a role in the business until they cross the $1 million mark in revenue), but we have to see when the right time is to get on top of that business and become the entrepreneur we always truly wanted to be.
It’s a difficult and awkward change to go from being the best technician in the building to hiring someone better than you and to no longer be the hero. If sales is your expertise, it’s difficult to let go and hand it off to someone else and not worry that the customer will only want to talk to you.
But as you make the adjustment and start letting go, you’ll quickly see it all start to come together.
And this all comes from a place of being able to properly understand your profit-and-loss statement, and allowing the numbers to be your boss. I’ve written about this before (“Numbers are the Boss,” April, 2018), but you need to let the numbers tell you what decisions to make so that you can grow your business and truly become a real entrepreneur. Most often, the difference between average business people and advanced ones simply comes down to them understanding the authority that numbers have over their businesses. Just because you believe your business should provide you a lifestyle doesn’t mean you can just go pull money if it’s not actually there. You have to understand that your ability to obey the numbers and listen to the numbers will directly correlate to your business success every single month. And the more you listen to your numbers, instead of hunches and other people who are broke, you’ll get there faster.
The numbers are telling you which way to profitability, which way to the north star. They are your compass, they are your guide, they are the boss. You are not the boss. The true entrepreneur realizes you still have a boss, but it’s no longer a person. It’s now the numbers. Once you understand that, you can truly have that lifestyle you always wanted.