This part 2 of 2 in the role of a business owner.  Read part 1 if you have not had a chance.

Objections:

First, it takes a mentality shift.  You might say:  “This all sounds great but right now, it is just me.” That’s okay.  You have to shift your mentality.  Right now, you may be scrubbing toilets, but if you are managing your business to specific goals and objectives – in a foreseeable time frame, you will never have to scrub another toilet. If we view our lives with purpose, we don’t view it as a struggle.  Scrubbing toilets is much more enjoyable as an “owner of the business” who is fulfilling this role temporarily.

Another objection is the fact that you may really enjoy being the doer in parts of the business.  One reason we become entrepreneurs is to do something we enjoy.  There is absolutely nothing wrong with this, but the business cannot be dependent on you. If your business is completely dependent on you, it is not a business – it’s a job.  If you enjoy sales, continue doing sales but don’t center  business performance around your ability to hit the sales goals.  Slowly work yourself out of that dependency.  Maybe you set a goal to only handle sales above a certain volume after a specific period of time, or only handle a fixed number of clients.

Ironically, one of the ways in which we build equity value in our businesses is by making ourselves useless to the business. In a different blog I’ll talk about equity value of a business and how those values are impacted when the owner is so critical to the business.  We go into more detail on this subject at The Entrepreneurship School and even talk about it in our module 1 videos (sign up on the blog or on the website for module 1), which are being offered for free right now.

So to sum up, your role as an entrepreneur is to function as the owner of the business – not the doer – by instilling inspiration, vision, and management.

As many of you know one of my passions as an entrepreneur is teaching other aspiring entrepreneurs and those who already have a business.  I’m able to do this as a lecturer at the University of Georgia as well as participating in speaking engagements to different business groups around the country.  As a speaker and educator, there are many questions from entrepreneurs that are similar.  Sometimes I give tailored responses, depending on the type and stage of the business.  However, there are some questions that I usually respond with the same answer, regardless of the group.  An example is:  “What is your job as a business owner?  or “What is your role as an owner?”

Some entrepreneurs may have a quick and ready response to this question.  They may say the owner makes sure the business runs effectively, gets new clients, or does the work.

As we all know, one’s ability to make money (Check out Jim’s blog that talk’s about the phrase ‘making money’) is limited as long as you work for other people.  The trick is to move into an ownership capacity (one reason why stock options in public companies are attractive).  Then what of the business owner?  He or she is also limited in the ability to make money if he/she is the primary “doer” in the business.

If the owner is the primary doer then he/she becomes the bottleneck to growth and value.  Why?  The business can only grow as much as the owner can DO – which is obviously limited.  From a valuation perspective, this severely limits the equity value of the business.  Simply put, you don’t go with the sale of the business.  If the business can’t function without the owner – it cannot grow or sustain itself without the entrepreneur’s involvement.

So what then is the role of the owner?  Three things:

1.  Inspire others.

2.  Instill a vision of success

3.  Manage others goals and objections thus thus allowing getting things done through others.

The idea with the three points above is that the owner is creating systems and processes and transferring those things that make him/her successful at being the “doer” to others in the business.  Thus, the business grows less and less dependent on the entrepreneur.  Also, the business owner works to create motivation and incentives so that others care about the business as much (if not more) than the entrepreneur.  As the owner accomplishes this, the owner is free to focus on the target customer and optimizing the design of the business around the customer.  From this point, growth and value can then start to increase.

Thus, as an owner you begin to shift from being the “doer of what the business does” to the “owner of all that the business does.”

In part 2 I explore the objections to this idea and how to address those objections.