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This is part 3 of a multi-part series examining the process of advancing from being an employee (standing on the ground looking up at the Entrepreneurial Ladder) to being a successful Entrepreneur, in the truest sense of the word. Last week I discussed the advantages and disadvantages of being among the ranks of the Self Employed. I also recommended some of the steps to take to reach that first rung on the e-ladder. This week, hold onto your hats! We are venturing into what, for many, is one of the scariest parts of growing in entrepreneurship - bringing hired help to our business because we can no longer advance on our own.
Rung Level of Entrepreneur Ladder
Entrepreneur: 5
Investor: 4
Owner: 3
Manager: 2
Self Employed: 1
Employee: 0
Level 2 - Manager
Congratulations! You've made the leap! You now have employees. Your new growth brings different challenges. Ask almost any large group of business owners: "what is your number one business challenge?". I predict that a large majority of the issues will revolve around obtaining, keeping, and managing employees. The Manager level of the e-ladder is where many business owners, after a year or so, experience so many headaches that they decide to downscale their business to just them - back to Level 1, Self Employed.
Before jumping to this unfortunate conclusion, please understand that the first business experience is usually the most difficult because we have to learn so much as we grow. Cash flow management is one of the biggest challenges growth brings, not to mention team building, systems, and leadership.
Don't get stuck at Level 2
Owners who get stuck at the Manager level fail to take some critical steps necessary to "creating a profitable enterprise that works without them". First position the business to grow through mastering the fundamentals, creating a solid cash flow pipeline, systemizing the routine, and employing a motivated team that embraces your vision; a team that is compensated based upon the success of the company.
To transition to the next rung of Level 3 Owner, a manager must develop into a leader. A manager controls resources and a leader empowers people. Most level 2 managers try to control their staff rather than lead their team.
Level 2 Managers are almost the same as Level 1, except now they have a few more headaches. Although they generally make more money, they still have commonality with Levels 1 & 0. They have to go to work if they want income. They are not financially independent.
As managers, we are in danger of working harder and getting nowhere - going around in circles, spending our time on day to day matters, rather than developing systems that will run the business. I've heard this many times: "I don't have time to work on systems. I've too many fires to put out!" Level 2 Managers become good at fire fighting. Ever wonder if you are working for your employees? The toughest and most intricate challenge faced by Level 2 Managers is building teams.
Advance to Level 3
So how do we break the cycle? How do we progress up the ladder to Level 3? People get stuck at this level because they have not learned the lessons of level 1 and 2. They should have learned everything they could about systems, team building, leadership, and recruitment - instead of running in circles after their people.
If we want to avoid Level 2 pitfalls we desperately need good systems in our business. They allow the business to function smoothly, sharing the workload according to the skills and talents of all team members. Systems provide us with the time margin to grow into a leader.
Once we have systems we can concentrate on providing meaningful leadership. Try growing a good business without good people! If we are not good leaders we will not attract good people. When we become good leaders we will attract good people.
As a business grows it will need specialists such as a: financial manager, operations manager, marketing manager, sales manager, and HR administration manager. ActionCOACH has a remarkably effective hiring system that will assist you in assembling your dream team Upon reaching this point in your business, it is time to think about appointing a general manager to free you for greater opportunities.
Those greater opportunities are found on the 3rd rung of the Entrepreneur Ladder - Owner. As an Owner, you have reached true time and asset leverage! This opens an entirely new vista of exciting possibilities for you and your family. Stay tuned to next week for discussion of Level 3 Owner.
MAD
Speaking of the next step, I am hosting a GrowthCLUB - Massive Action Day for all business owners at The Inn At Palmer Divide on Friday, April 1st (no that isn't an April Fools Day Joke). The objective of this workshop day is to leave with a 90 day plan for accelerating your business. Contact me for additional information.
We are now ready to climb to the second rung on the Entrepreneur Ladder!
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