Posted on May 21, 2011
How to Go From Employee to Entrepreneur: Part 2
After covering the first steps last week, this week we move on to the really exciting stages of becoming a true entrepreneur, so let’s get started.
Level 3- The Owner/ Leader- Few business owners get to this level and many that do get here by accident. By the time you’ve reached this level, you should understand that trading time for money is not the formula for getting rich. Before reaching this step, that’s basically what you’ve been doing. Ideally, you’ve gained the necessary skills to move up to Level 3, but basically you’ve been nothing but a glorified employee. That’s no longer the case. The move from Level 2 to Level 3 requires a change in your mind-set. This is especially important in how you relate to money. At this stage, instead of just taking a wage from your business, you’re starting to generate profit.
Once you reach this level, you need to let go because the relationship with your business is different and not as hands-on. That said, you must continue to forge ahead. At the Owner/Leader level you have more time on your hands to focus on the big picture, because you have systems in place. You can’t reach this stage without a strong team and of course you’ll need a manager to oversee the day-to-day activities of the business. In other words, at this level, you’ll need to learn to trust. You’ll be thinking very differently now than when you were a Level 2 Manager.
Your job at Level 3 is to work in the background, lending encouragement and guidance to your team, letting them take credit for success and directing the business as it grows and prospers.This is not easy for many business owners to reconcile, because they are so used to doing things a certain way. That’s why the change of mindset is so vital to be successful at this stage and move on to the next level.
Level 4- The Investor- Investors have a very different way of thinking compared to the previous levels. They think according to what I call, “The Rule of Zeroes”. Amounts with just one zero are pocket money, like $10 or $20. When we move to two zeroes, we’re probably talking about jobs. Most employees would expect to earn hundreds of dollars every week. Those that earn three zeroes are likely professionals in sales or management. These are good jobs, but limited in their earning power. To get that earning power, to add another zero, you really need to be in business.
So ask yourself, how many zeroes do you sell in your business every day? As you move up levels, your number of zeroes is changing. If you have a two zero income, what changes do you have to make if you want to dramatically increase your lifestyle? You need to make massive changes and build on each one. People at the Investor stage are well beyond two or three, or even four zeroes. They are playing a very different game than the business owner.
As an investor, you make your money selling businesses, not running them.
Level 5- The Entrepreneur- This last level is the most exciting because this is where the true capitalist operates. At this level, you make money by raising capital, which is basically using other people’s money to build paper assets like stocks, shares, franchises, licenses and royalties. How did Steve Jobs become one of the richest men in the world? He did it by selling shares of Apple. Sure, Apple is one of the most profitable companies in the world, but it doesn’t make enough profit to make Jobs one of the richest men in the world without selling some of it.
True entrepreneurs build their company to take it public because it allows them to create a tremendous amount of wealth almost immediately. At Level 4, the emphasis is on buying, building and selling. Now the name of the game is selling, but what you’re selling has changed. You’re selling franchises and shares rather than products or even companies in one time deals. In other words, you sell the investment you’ve created. The entrepreneur acts as a visionary with the time to consider the big picture, the systems in place and the reputation to make it all possible.
To sell a dream you have to work very hard, but if you never give up, stay committed and keep you mind focused on what isn’t real but soon will be, you can trust yourself and your team to turn it into reality.
Brad Sugars is the Founder, Chairman and President of ActionCOACH, the world’s number one business coaching and executive coaching firm, with more than 1,000 offices in 32 countries. ActionCOACH specializes in coaching small to medium size business as well as executive teams and group coaching. You can follow Brad on Facebook and Twitter.
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