You never get rich AND increase the quality of your life unless you have the ability to let others— partners & employees—make you money. I constantly find myself working with partners and employees to help them develop skills as business owners and leaders. Several months ago I was texting one of my partners about the fact that he had a nice ability to build a team, but his inability to create systems for that team was hurting the whole operation. As the conversation progressed, he flipped it back on me and said, “I agree that I need to get better at developing systems for my team, but take it out to a 10,000 foot perspective and break down for me what you think are the five most vital skills I need to be developing if I want success. I never really thought about systems, because I had always just figured if I had a great team in place, that the systems would come together themselves. Now you are telling me this is a whole ‘category’ or ‘skill’ I need to be thinking about, and they almost seem like two different sets of skills. Building a team requires more sales-type skills, and creating effective systems is more analytical-type skills.”
I agreed with his observation, and started to think back on the Vital Skills I had to develop as an entrepreneur in order to find the success that I wanted. I am aware that there are whole books dedicated to entrepreneurial skill development. However, I keep things simple, and even after I have read those books, I find myself boiling down the methods they introduce to core ideas and concepts. Which is why, over the next few chapters, I would like to break down each one of those Vital Skills (or, as I like to refer to them, Glass Ceilings) I have had to develop, illustrate why they are each important, and point out how the failure to develop each one will act as a glass ceiling to your growth as a leader and business owner.
5 Glass Ceilings every entrepreneur needs to master:
- Supplying product
- Selling Product
- Building a team
- Raising capital
- Developing systems
It doesn’t surprise me at all when I hear statistics about the majority of small businesses failing within a couple of years. Not only do most small business owners only get in the game because they have stumbled onto one (identifying a product) or two (identifying a customer for the product) of the vital skills they need to be successful, but they usually fail or stop growing because they develop only three of the skills, and then stop. Building a team, developing systems for that team, and raising capital become the downfall for so many companies. I see over and over again a business get 1 and 2 and maybe even a 3rd skill, but then completely bomb because they never progress into skills 4 and 5.
When I meet 7, 8, and 9-figure income earners, with 7, 8, and 9-figure businesses, I always think about how they have specifically mastered all five of these vital skills, or how they have partners whose complimentary personalities allow for all of the skills to be present in the partnership.
I recently met with two partners that sold financial services. Last year was their best year ever. They had made $1MM, but it was the 3rd year in a row they had only been able to increase their sales less than 3%. They were frustrated because they knew they had:
- A product they were successfully supplying;
- The skills to close clients on sales when they had leads;
- Enough capital to continue making $1MM a year (but not enough to grow it)
They were working from home, so they didn’t have a team, much less any systems in place to handle the kind of money they thought they wanted to make. They also had no clue how to structure win/win relationships with groups that could send them quality leads. Nor did they understand what was required to successfully work with capital partners who could fund the growth they wanted.
As we dug into these deficiencies, I noticed an interesting reaction from my friends. They started to balk at doing the things necessary to grow their business, like raising money to buy an office, furnishing the office, and hiring employees. This is a very scary step for small business owners. The thought of a commercial mortgage payment, payroll, and office overhead is intimidating and can seem like there are profits disappearing.
There was every reason in the world why they could still work from home and not have to spend money leasing or buying an office, furnishing it, and then laying out the capital (taking on the risk) required to double their earnings. They actually HATED the thought of all that risk. Why, in their minds, should they have to do that to make $2MM a year when they didn’t have to do all of that to make $1MM a year?
I didn’t argue with them. I realized that most business owners subconsciously find an equilibrium point at which their earnings balance with the risk they are willing to take. I see all the time fellow entrepreneurs who have stalled in revenues and DON’T attribute it to the fact that they lack the skills to grow and blame it on some external factor. They also look to pin that blame on Government regulations or a competitive landscape in their industry, or even prior circumstances, like a previous partner or employee who stole from them.
There is nothing wrong with deciding not to push growth of a business. I don’t want to try and sell 100 properties a month. It’s not that I don’t want to make the money, but I don’t want to take the risk, and build the systems and team that would be required to supply 100 properties a month. HOWEVER, I didn’t make that decision because we are “stuck” at selling only 50 properties a month. I didn’t make it because I lack product, or customers, or a team or systems or capital…. I made the decision based on what I want for my company at this stage in my life. I KNOW I could grow to selling 100+ properties a month, and that I have the personal skills to lead my organization in that decision, yet I make a strategic decision NOT to pursue that avenue for a myriad of reasons.
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