How to avoid Pitfalls of a Business Owner?
A business owner has huge rewards but problems as well.
A business owner, probably, will be making more money but it will not be enough. One of the byproducts of growth is the shortage of cash. To grow, you will need more and more cash. Cash management becomes crucial to your success. You will also need organizational changes, build systems and leadership within your organization.
As your business grows, you will hire more employees. There is a saying, “employees cause more headaches than machines.” You will be let down time and again if you do not hire properly qualified manpower and train them for their tasks, unfortunately, instead of relaxing, your problems will grow exponentially and you will find yourself working harder and longer hours.
Hiring a Manager
At times, the situation becomes so stressful that an owner wants to hire a manager as you have money to do so and run away from all the problematic issues. If this is done pre-maturely, it can cause a company to collapse. You will need to place systems, checks and balances in place before you can think of handing over your business to someone else and retire.
Handing Over Control of Business
On the other hand, there are owners who find it extremely difficult to hand over managerial control of a company they have worked so hard to build—it is their baby, after all! They think that no one can do a better job than them.
To succeed at this level, you must first find someone who is perhaps as smart as or better than you to run your business. Once you have found such a person, you have to develop the mindset to let go – it may sound simple but is very difficult as you have been the hands-on person all your life.
You should trust the person you have appointed to run your business and refrain from interfering daily in running of the business. You are now an owner/leader and no longer the hands-on person … it is time for you to now relax and work towards a strategic view of your business and growth.
Finding New Investments and Growth Opportunities
Your focus now should be on finding new investments and increasing the profitability of your business. Maintaining a healthy cash flow is the responsibility of your manager. Although you are not involved in running your business on day-to-day basis, you must keep a tab on your business from monthly/ quarterly or through annual reports. You should intervene only when things are not progressing as planned.
Once you reach this stage, you no longer have to perform any physical activity in running your business. Your income from the business becomes passive—this is where the fun begins. You will be devoid of any daily pressures of running a business. This will give you time freedom to read, meet people, grow your business network and prepare yourself to next step of financial growth and challenges.
At this stage, your focus should be on building capital to invest in other businesses. This is important if you wish to become rich and wealthy. After this stage, you simply become an investor. You buy assets that will give you even more passive cash flow.