This post is about a study of strategies to create positive change in your business and life!
What is business freedom There’s a great question we need to answer before we look at why business owners rarely achieve it.
See it defined and take the Business Freedom Assessment.
Business freedom is different for different business owners. For some business owners it would be enjoying an income from business ownership, never going to work in their business again.
Believe it or not that’s not what experience shows the majority of business owners want (in seen by their choices and actions when it’s very achievable.
Business freedom is best defined as not being at all concerned about your business so you never think about it at night or on weekends once you leave work.
The reason you don’t think about it is because you aren’t affected by it emotionally. You don’t feel stress or pressure because you earn good money, your business is managed well and it looks after you, not the other way around. You can take a holiday mid-year for a month or more and life is great. You have lifestyle choices.
So if that’s what we can define as business freedom so let’s now look at why so few business owners actually reach this level of success or achieve a passive income.
From working 1 on 1 and in workshops with over 1,000 business owners for 18 years, this experience has been very insightful about the inner workings of business owner’s minds. Some dedicated clients of mine have achieved the true entrepreneur level of owning a business they no longer work in, at all while most don’t.
An electrician client went from working 80 hours every week to zero in 10 months! Others have taken a bit longer with the average time being 15 months. That’s not a long time considering the rest of your life is it?
Experiences with business owners show they aren’t driven by a burning desire to have a passive income from their business as shown by the very few that achieve this outcome despite the complete system of achieving “business freedom” being available to achieve it. And it is VERY achievable for the majority of businesses and business owners.
You would think people would get excited by this and turn up in droves to attend the very affordable Academy of Business Mastery so they can finally put an end to a lack of time and money, staff issues and having an average quality of life but strangely enough people rarely believe what they see and hear even though the evidence is provable by results and the step by step system is there to follow.
So the first realisation about why so few business owners achieve true business freedom is… they don’t truly desire it.
Another major reason is … business owners aren’t in “have to” mode.
When you get into “have to” mode, you can achieve anything, can’t you?
But why do people wait till they “have to” before achieving great things? Good question!
The reason is due to… self-worth and personal power.
Few people fully feel like they deserve and “want” a passive income. Sadly they get used to struggle and stress until it becomes a ‘normal’ part of their life. With few dreams to strive for in the future you have little need for ‘how-to’ systems and can therefore easily become sceptical of anything promising something you aren’t striving to achieve.
Keep in mind you rarely want something better in life until you’ve either had a taste of it or experienced it. This reason is by far the biggest and most influential of all about why a business owner will or won’t achieve the highest level of business freedom.
If you don’t specifically define what you truly want, you will never have it
Napoleon Hill said it best with his book title – “Think, and Grow Rich”. That meant think… very clearly about what you want and then you will have it.
Until you get real clear of exactly what you want from business ownership, you will get what you don’t want, because you create what you focus on – e.g. lack of time, money, stress etc.
Let’s just imagine you got really clear on exactly what you wanted from your business, put it in writing, got excited, passionate and by not having it, so much so you would do anything to achieve it and would even attend training, pay for it and use what you learned!
So what’s another reason why you don’t have business freedom?
People skills – i.e. your team building and leadership skills.
The reason this is a major factor is… if you weren’t running your business every hour, day, week or month it operates, that must mean someone else is and your people skills determine if that is possible or impossible for you!
That brings up an interesting subject called trust.
Trust is something most business owners don’t have with people (e.g. their staff). As a result they can’t ‘trust’ someone else to price their services, they can’t trust someone to deal with all their best customers and they can’t trust them with access to the business bank account… just to name a few areas and examples.
Lack of ‘trust’ is really caused by a lack of people skills. Let’s face facts, there are some people in our society who are extremely trustworthy, you are probably one of them, and there are some people very untrustworthy. Can you tell the difference accurately and quickly?
What business owners call trust, is usually a desire for predictability. If you truly understand emotional drivers, belief systems, values, DISC profiles and human behaviour of people (all very learn-able subjects), you can easily recognise who is trustworthy and who isn’t and determine that very quickly.
This is a skill like anything else in life. You can learn it, with a great teacher complimented by a keen interest.
When you learn a lot about people they become very predictable hence trustworthy. Without knowing who is trustworthy and who isn’t, you are right with having a fear of what might happen if you leave your business, money or customers in the hands of any employee.
So where do you get trustworthy people?
You attract them with a great recruitment system (like the one given to attendees of the Academy of Business Mastery training). You need to improve your people skills to the level of the ability to pick great attitude (trustworthy) people, before you hire them. Until you can pick them before you hire them it will be extremely hard to find trustworthy people to leave your business in the hands of.
The next major factor preventing business freedom is just as important as the others previously mentioned and that is your Net Profit Margin. If your net margin is low (below 10% if you’re turning over more than $750,000) then you will probably be struggling with money (not always, as it depends on cash flow levels relative to your industry).
The net profit margin is the most overlooked (and most important) Key Performance Indicator (KPI) in business today.
Its also the most important KPI to focus on. The more efficiently your business does work the higher the figure gets.
Research has shown 90% of all businesses operate with a net profit margin of less than 10% (with turnover above $750,000). Rare it is that a business fails, goes bankrupt, closes down or ceases to exist due to some factor apart from net profit margin. Cash flow is the only other reason and that often (but not always) has a lot to do with net profit margin.
The reason why net profit margin really affects your ability to have business freedom is because when it’s low there isn’t enough surplus cash to turn your own salary into a passive income AND hire someone else to manage your business and do your work.
When the net profit margin is low business owners find themselves working every hour their business operates and then some. (Sound familiar?)
Often its 80 hours a week (including ‘thinking’ time at home, nights and weekends), week after week, year after year, for the owner who is constantly heard to be saying, “I’m really busy” as an affirmation, confirming how busy they are by their constant focus on busyness. Never slowing down to realise running a busyness has nothing to do with progress, lifestyle or the achievement of business freedom, in fact busyness is in the opposite direction of that reality.
When you focus on improving the ‘3 Core Skills’ of business and management – people, measuring and systems, you create a synergy between all 3 areas. That means money is liberated, progress is experienced by the team (that become happier), numbers become your weekly method of decision making with absolute certainty and you make changes daily and weekly that literally transform your business in weeks or months – to become a profit generating machine that works hard… without dependency on you!
By measuring sales (getting work in), production (doing the work) and cash (getting paid for work) each week you start to see trends, long before they become stressful points. This is the basic start of managing by measuring.
The most important systems is to have one for pricing everything you sell based on a desired gross and net profit margin. Before you can do that you need to understand what is a Cost of Sale in your business and investigate your Chart of Accounts with a business management expert.
This is a huge subject so this newsletter won’t be the place for that, its covered in the Academy and is a major focus of all of Workshop 3 and with the spreadsheets for measuring Sales, Production, Cash flow and Profit Margins.
Until you have a true “system” for pricing everything – not a “guestimate” based on a mixture of fear, material costs, scarcity, and assumptions of what you are guessing customers may pay – you can never have true business freedom.
You also need a system of reviewing all sales outcomes (i.e. production work) so you can learn from experience of ‘quoting’ to see true margins before and after every single sale.
Until you have both systems – for pricing and reviewing pricing after work is carried out – you will never leave anyone to run your business as there isn’t true decision making by numbers.
In summary, business freedom isn’t hard to achieve. Not know the factors preventing you from having it makes it impossible to have, but once you know about these factors (discussed in this report), you’re halfway there to addressing them and achieving it!
If you haven’t attended the Academy of Business Mastery and you’re reading this, then ask yourself… “Why haven’t I? What prevented me from deciding to attend? Was it being ‘too busy’ or ‘the timing isn’t right’?”
Think about this question – “Will the timing ever be perfect?”
Entrepreneurs don’t wait for perfect timing, they ACT!
NOW is always a great time to become extremely successful. Successful people always have time for more success; because it’s a priority not something they’re too busy to focus on.
We always have time for what we personally feel is important. Running a busyness never ends.
What financial progress have you made in the last 365 days that is measurable and provable with real profit margin improving figures? I believe 365 days is almost an eternity in a business to wait for an improvement. A month is about as long as you should wait to see a measurable improvement in your business or life.
Clients have gone from 80 hours a week of hard work, to ZERO hours and left their business safely in the hands of their trustworthy team and achieved that in just 10 months! They didn’t have time to do what was necessary to achieve this, but they had a burning desire and used it to create a wonderful change in their life. That business owner moved his family 630 km away from where his business operated without him and enjoyed a passive income from his business for years.
As Albert Einstein said “The level of thinking that created the problem can never solve the problem”.
Think about that next time you say you’re ‘really busy’ or ‘I haven’t got time now’ and remember business freedom just a decision away.
Have a thoughtful week! Think about the choices you need to make to have more business freedom your life.