8 keys to a bigger, better business. Key number 2 …

Posted on May 10, 2016 by Laura Humphreys

Here it is … key 2 of my 8 keys to a bigger, better business. These keys are aimed at ambitious business owners, those looking to create something of significant value both in terms of what you offer and in terms of what your business is ultimately worth financially. Getting bigger and better isn’t necessarily easy, but if you’re up for it, read this key and think about the exercise at the end before the next blog.

Key Number 2. Create an asset not a job

If your business is dependent on you for its survival, if it can’t survive for more than a few months without you being there to keep it going… and you haven’t got a plan to change this over time… you haven’t created a business, you’ve created a job.

The difference between an owner operator and a wealthy entrepreneur is that an owner creates a job whereas an entrepreneur sets out to create an asset.

An asset is something that will feed you income even when you are not working… which means it has to have value. A business that is a true asset has to generate profits without dependency on you, and it has to grow value over time so that someone else would want to pay you significantly more than you’ve invested (including your time, sweat equity, opportunity costs and money) in it.

So if you are serious about building a bigger, better business… you have to ask yourself now, have you created a job or an asset? Where is the real value in your business? Is it you and your talent and your skills? Or have you created value through systems, product and team?

And you have to ask yourself if you are willing to make the necessary changes. Because doing what it takes to move from a small business to bigger business, one that has true financial value, takes a shift in mindset. Are you willing to do what it takes to make this shift or would you rather stay inside your comfort zone?

The answers to these questions will determine whether its worth you reading my next 6 keys on creating a bigger, better business.

Exercise

Answer the question honesty: Have you created an asset or a job?

If its the former… you are on the right track, so what needs to happen to increase the value of your asset? Write down the 5 key strategies you have in place to ensure growth. (Keep reading my keys… we’ll cover this).

If it’s the latter… do you really want to change this? Think about your comfort zone … how willing are you to get uncomfortable in order to grow? In my experience, only those willing to make changes in mindset will do what it takes to create a valuable business. It isn’t for everyone but it is worth it.

As always feel free to email me at laura@liber8u.com with questions or ideas on this topic, or leave a comment below.

The 2016 Elev8or Group is coming soon!

For ambitious business owners who want to create an asset not a job. Only 10 business owners will be selected to join … are you ready for it? Click here for more information.

Have you created a business or a life-long job?

Posted on April 23, 2014 by Laura Humphreys

‘Successful and unsuccessful people do not vary greatly in their abilities. They vary in their desires to reach their potential.’ John Maxwell

One of the first questions I ask when I present to business groups is: ‘Why are you here? Why are you in business? Why on earth have you left the security of a job with regular pay to start your own business, with all the uncertainty this holds?’

I always get similar answers.

Mostly, people say they don’t want to work for someone else. They don’t want someone else’s culture.They don’t want to be told how the way it should be done. They want to be in control. They want flexible hours and to spend time with their children. They want to be able to go on holiday when they want. They don’t want someone telling them how many weeks’ holiday they can have a year. They want to do something they really love. These are all honourable reasons for starting a business.

But, ironically, many business owner-operators end up with the complete opposite. They find themselves with little control. They discover their clients have the control and will often demand they work longer hours than they ever did when working for someone else. Most small business owners pay themselves less than they would be paid working for another company.

Crazy, I know, but it’s true. You go into business for freedom and control and end up working longer hours and earning less. Sound familiar?

Many business owner-operators don’t take holidays. They start their business believing they will be in charge of their own holidays, but they find they don’t go on holiday at all. I met a woman who owned a chain of motels with her husband. They hadn’t been on holiday for five years. When I asked her why she got into the motel business in the first place, she told me it was for the lifestyle. Go figure!

If you pay yourself too little, work long hours, and don’t take decent holidays, you can feel resentful. Worse, you can fall sick and be unable to carry on. A high percentage of businesses fail (and by fail I mean they stop; the owner gives up) within five years of start-up. Disillusionment gets the better of them. They go into business to set themselves free and find themselves with a virtual chain around their ankle. Not surprisingly, they decide they don’t want to do it anymore. But that’s not going to be you, is it? Most people who fail to achieve financial freedom through their business do not have the right mindset. Let’s just take a look at a true story for a moment to illustrate my point:

The story of Julie and Fliss

I was having coffee with an old friend one day. Julie is an amazing lady who had started her first business and built it over 20 years until it was bought by a huge multinational group. She became wealthy and continues to build her wealth through angel investing and mentoring start-up businesses. She has a wonderful life. We discussed how special it was to be able to spend quality time with our kids after school each day and how we enjoyed helping other people learn to build a quality life through business. We got to talking about a woman we both knew. I’ll call her Fliss, for the purposes of this story. Fliss opened a business at the same time as Julie. She is a dress designer and opened up a little retail store in the town where she lived.

Twenty years later she still had that small shop and she was still making the dresses. Fliss was no better off financially and she still had to keep designing and making the dresses to sell in her shop. Of course, there’s nothing wrong with that as a life choice and as far as I know, Fliss is content in her life. I don’t want to appear scornful of someone doing something they love. If you’ve got a talent for design and you’re happy with a small retail shop in a small town, there’s nothing wrong with that – as long as you are aware that this is where you are at.

But what worries me with the owner-operator mindset is that Fliss, like so many other owner-operators, will wake up one day and won’t want to do it anymore. As much as she loves designing dresses, something will happen that changes her ability to live off its income, for health reasons or, more likely, because she’s lost the passion for it. The danger of not having a plan to sell is that she can end up with a business worth nothing to anyone else, meaning she’s stuck with it. What will she do for income when her desire or ability to make dresses is no longer there?

The freedom mindset

Let’s look at situations of these two friends. Why did Julie go one route and Fliss go another? The key difference was the mindset.

One knew she wanted a business she could sell and create a lifestyle where she never had to worry about money again. The other wanted to make pretty clothes. They both made their choice; probably without even realising they had done so. Fliss chose to employ herself in a job she enjoyed. She did not choose to build a business.

We make choices every day. The most important choice is one you may not have given much thought to – until now. Are you choosing to build a business that will pay you back or are you choosing to work for a living?

My book Liber8 your Business explores this question at length and gives you a practical 8 step process to follow if you decide that financial freedom in the future is something worth working for.

From the desk of Liber8me. Business mentors and publisher of Liber8 your Business: The revolutionary business planning technique that will set every small business owner free.

If you can’t be a billionaire why bother? Does every small business owner have to be the next Richard Branson?

Posted on April 1, 2014 by Laura Humphreys

I had an interesting debate on Linked In recently after I posted my blog “Some frightening statistics about small business” onto a discussion group. I thought my point was that if more small business owner operators were inspired and equipped to grow a valuable asset rather than settle for a low paying job, our economy would be better off – and a whole bunch of people would retire with enough wealth to lead a life of freedom, instead of having to panic when they get too old to keep doing that job any more.

The debate that raged on Linked In seemed to be between me and a strong school of thought that believes if you don’t have the potential to be the next Rod Drury (CEO of Xero) or Richard Branson then you should not have aspirations to grow. “Leave them alone” the argument went – let the small thinkers stay small and let’s put our energies into the big thinkers who will be the next global dominators. This is where the real gains are to be made.

Sorry I can’t do it. For every small thinker I can help become a bigger thinker, I will feel my work is worthwhile. Between the billion dollar global business and the solo operator plumber there are a myriad of other business types, sizes, aspirations and dreams. My work is to encourage others to see their business as a potentially valuable asset, not just a job. It could be a desire to build a business that generates $60k per annum passive income, or a $100,000 sale. Or $500,000 sale, or $3 million or $10 million. Or $100 million. I don’t put a judgement on the size of someone’s business or the size of their dream. I just want people to be aware that they have choice. To choose the easy road now and not think about building something of value as you go will inevitably lead to a road that’s harder down the track. To choose a harder road now and learn to build something greater than a job for yourself, will increase your chances of a life of freedom down the track.

I just want to give people more choices through education and inspiration. Not every owner operator wants to grow of course. That’s fine, let them work out their retirement their own way, sure. But some do and don’t know how, some lack confidence, some lack knowledge. My mission is to provide the motivation and then the tools to give small business owners a better chance at creating value.

So to all small business people who don’t aim to take on the world, but want to make a difference to their lives, their families and their communities. Rock on. I won’t leave you alone.

Thanks for listening to my rant!

From the desk of Liber8me. Business mentors and author of Liber8 your Business: The revolutionary business planning technique that will set every small business owner free.

What does financial freedom mean to you?

Posted on June 5, 2012 by Laura Humphreys

Here’s another excerpt from my very nearly finished book:

I’ll quickly tell you this story about my father. He died at age 73. Which seems far too young these days, when most of us hope to live well into our eighties. The good news was that he retired not long after his fiftieth birthday, so he’d had 23 years of freedom before he died.Thanks to the sale of his photocopier sales business he had a grand old time after retirement. Not a flashy life but a very fulfilling one. He and my mother travelled first class around the world to places they’d always wanted to see. When my first child was born and we were living in New Zealand, he flew my family first class back to England so he could see his grandson. The ability to do that is really cool, don’t you think?

A story was told at his funeral that I’d never heard before and it sums up the beauty of financial freedom for me. Apparently one day my mum got a call from a Veterans Association in England wanting to talk to my dad. When she told them he was out, they said “We just want to thank him for the £10,000.” “What £10,000?” she asked. “Oh, didn’t he tell you?” they replied. “We’ve just received a cheque from your husband for £10,000.” So when my dad came home later she asked him what on earth he was doing sending £10,000 to the Veterans Association. He looked at her and said, “I saw their ad in the paper, trying to raise funds to send a party of veterans to a memorial in France where a bunch of their colleagues had died at war. So I rang them and asked them how much they needed. They said they needed £10,000 and I gave them the whole lot.” My mum said, “Why on earth did you do that?” To which he replied, “After everything they’ve done for our country they shouldn’t have to beg.”

To me, thanks to the lessons from my father, finanical freedom means the ability to make a difference to others without having to worry about paying the bills.

What does it mean to you?

From the desk of liber8yourbusiness. Business mentors and experts in small business exit strategies. Based in Wellington, New Zealand.