December 17, 2024 • 23 mins
Last episode, we discussed the first four stages of the Seven Stages of Business Ownership and the treadmill effect that traps many entrepreneurs. Today, we’re exploring Stages Four through Seven, which give you real freedom IN your business, not from it. Will also reveal why almost all business owners get stuck in Stage Four and won't take the small, measured risks to get that freedom.
Everything rests on "The Big Mindset Shift", and when business owners make this shift, they invariably build a business that regularly gives them both time and money, and a life of significance.
- Stage Five: Success is the first Stage the produces time for the owner, not just money. It is the first Stage where we experience true freedom IN our businesses, by moving from producing to building simple processes that let others produce for us.
- Stage Six: Significance gives us abundant time and money from our businesses by focusing on training others to lead, and then leading THROUGH them. Stage Six is the second most dangerous Stage behind Stage Four, because we have a tendency to want to go play golf before our leaders are fully in trained and in charge.
- Stage Seven: Succession isn't about selling, but about becoming "The Myth", where your business runs smoothly under capable leaders, with you providing vision and occasional guidance, many times without any day to day involvement. When people build Stage Seven businesses, they never want to sell them.
Moving from Stage Four to Seven is all about The Big Mindset Shift, and a simple principle, "You get what you intend, not what you hope for."
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
(00:05):
Welcome back to the Get Off The Treadmill
podcast for small business owners and entrepreneurs, where
we show you how to build a successful
business and to have a life too.
We're going to dive into another topic that
helps us make more money in less time
and to get off the treadmill so we
can experience a life of significance.
And now your host and the author of
(00:25):
the number one bestselling business book, Making Money
Is Killing Your Business, Chuck Blakeman.
Hi, Chuck Blakeman here again with you today.
We're going to talk about the seven stages
of business ownership, part two, that big mindset
shift.
In our last podcast, we walked through the
first four of the seven stages of business
ownership, the first four stages that got us
(00:47):
on the treadmill.
Today we're going to talk about the last
three stages, which are the three stages that
get us off the treadmill.
This is a standalone podcast, but you might
get more out of this one if you
checked out part one of the seven stages
first.
And I want to reemphasize this about the
seven stages of business ownership.
It's not about the stages of business.
I'm focusing on how our business affects us,
(01:08):
which is a major reason why I'm in
business to get where I want to be
personally.
Let's speed through those first four stages just
to set up the last three.
Stage one startup is before you spend a
nickel and are getting your ducks in a
row.
And it's the what fun stage of business.
Stage two survival starts when you pay your
first bill and aren't profitable yet, and the
business is starting to suck the life out
(01:30):
of you in both time and money.
Your emotions change from what fun to I
didn't think it would be this hard.
You're in stage three when you finally break
even regularly, and you've learned the bad habit
of being on the production treadmill.
Stage four stability is when you are finally
making a profit regularly, can buy a hot
tub and maybe even a boat for your
family and other people to use.
(01:52):
Because you finally have money, but you probably
have very little time and you are now
officially a hostage to your business.
You thought you were building a company, but
instead you built yourself a job.
Welcome to stage four.
Well, most people stop when they reach stage
four stability, not because they have to, but
because they've never thought there was anything beyond
that.
In the last podcast, we identified stage four
(02:13):
stability as the American dream, which we sadly
have exported all over the world.
But it's really the American nightmare.
Stage four stability is the most dangerous stage
in business because for the first time you
finally have something to protect, profit.
And our instinct is to protect that with
every fiber of our being.
Unfortunately, that very understandable desire to protect the
(02:36):
great thing you've built is the Trojan horse
from within that will ensure you never get
off the hostage treadmill.
And you will very likely yo-yo between
stages two, three and four on a regular
basis for 30 years.
Your desire to protect your business will give
you the opposite of what you want.
I did this multiple times in multiple businesses,
but protecting what I had never got me
(02:57):
to what I really wanted, which was freedom
in my business.
As a result, stages one through four are
the only stages most business owners ever experience.
Not because it's extremely hard to get to
stage five or beyond.
I personally think it's harder to get from
stage two to stage three, but because we
simply don't intend to build a mature business
that gets to stage five and beyond.
(03:17):
We never thought it was possible because the
American dream illogically tells us that being a
hostage to your business is just the price
you pay for freedom.
Really?
Ironically, we truly do get what we intend
and too often we intend to be hostages
of our businesses for 30 years.
So what intention is needed to get to
stage five and beyond?
First, we need to decide what we want.
(03:38):
Not what our business wants, but what we
want as a result of being in business.
Stephen Covey said, start with the end in
mind.
What does freedom in your business look like
to you a few years from now or
even next year?
Until we know that we're operating on the
random hope strategy of business, you know, I'm
going to work really hard and I hope
something good happens.
We'll expand on this in a future podcast
(03:59):
on the significance quotient and how the three
main resources in life, time plus money plus
energy, give you the freedom to build a
life of significance.
In an earlier podcast, we've talked about building
a mature business and we defined it as
a business where you're no longer the only
producer and maybe not even one of many
producers and the business makes money when you
(04:20):
are not there.
That's my Stephen Covey end in mind.
That's what I want from my business, from
any business.
I want a mature business that makes more
money in less time so I can have
ongoing freedom in my business, not from it.
It's up to you to describe what a
mature business means to you.
I would encourage you though to use the
above two benefits as the baseline for business
(04:41):
maturity, making more money in less time so
you can have freedom in your business, not
from it.
Anything less, I don't think you're still on
the treadmill.
It's especially important to remember that business maturity
really isn't about the business at all.
It's about you and the lifestyle the business
produces for you.
On the back cover of my first book,
Making Money is Killing Your Business, we splashed
(05:02):
the message, use your business to build your
ideal lifestyle.
The only way to really know that your
business is mature is if you are living
the way you want to as a result
of owning it.
The size of your business and how much
money it makes doesn't matter if your lifestyle
sucks.
It's the lifestyle you are experiencing that tells
you that your business is mature.
(05:23):
Over the 13 businesses I built, I've learned
the hard way that making money is not
an empowering vision.
I know plenty of people who have tried
it, including me, to build a business that
provides the lifestyle you want.
You need a vision that motivates you, real
clarity about what your life looks like when
you've arrived.
A friend of mine does business advisory and
had a client who told him after 150
(05:44):
,000, it didn't make me any happier to
make 500,000.
I've had my business advisory client say the
same thing.
Some people push the numbers up or down,
but you get the point.
Money never makes life more meaningful all by
itself.
It's a resource, not a goal.
It means to the end, never the end
in and of itself.
So while making money doesn't make life meaningful
(06:04):
all by itself, what we can do with
it can make life very meaningful for us
when we combine it with the other two
resources of free time and great energy.
A successful business owner eventually figures this out.
Making money is not an empowering vision.
Neither is a lifestyle being trapped as an
employee of yourself.
(06:24):
Either way, if you want to be successful,
you're going to need to figure out how
to build a business that makes money when
you are not there.
So let's talk about moving from stage four
stability to stage five success.
In stage four, we finally have profit, maybe
even millions we can take home.
But we still don't have the time and
freedom to use it the way we want.
We're still hostages to our business.
(06:46):
You know you are finally in stage five
when your business is regularly giving you both
time and money, not just money.
You can regularly be away from the business
every Friday or Wednesday afternoon or both and
take a couple of weeks vacation and not
work while you're away.
And it's not just about being able to
escape from a hostage situation for a day
(07:06):
or a week.
The key to stage five stability is that
while you are away, the business makes money
without you.
Anybody can take Friday off and lose money
while they're not working.
I've done it.
This is not a stage five business.
Are you able to go away for a
day, a week or two or even a
month?
And when you come back, there's more money
in the bank than when you left.
(07:27):
That's a stage five success business.
That's what I experienced in February of 2011
when we went to New Zealand for a
month for our business maturity vacation.
When we got back, revenue and profit were
higher than when we left.
My anecdotal research tells me probably less than
5% of business owners ever take the
small measured risk to move from stage four
(07:47):
stability to stage five success.
That 5% marker might make us all
feel that a mature business that gives us
freedom in our business, not from it, is
for either the smart or the lucky.
But that is not my experience.
I have regularly witnessed business owners who are
on the stage four treadmill for even decades
who were able to get off of it
and jump to stage five or beyond in
(08:08):
a year or less simply because they changed
one thing, their mindset.
They were no smarter or no luckier than
they had been for decades.
They simply changed their intention and experienced what
we call the big mindset shift.
The big mindset shift looks like this.
In stage four stability, our mindset is still
the same as it was in stages one
(08:29):
through three.
I am making money.
To get the stage five success, the mindset
shifts subtly and yet radically from I am
making money to I'm building a business that
makes money.
Let me repeat that.
A shift from I'm making money to I'm
building a business that makes money.
Do you see the subtle radical difference?
(08:51):
In stage four, I still think I'm necessary
in order for the business to make money.
In stage five success, we become more like
Richard Branson.
We begin to realize this business could and
should make money when we're not there.
When we come to the end of ourselves
and we realize we can't be the business,
everything changes.
I can't overemphasize this concept.
It's the crux of the whole problem and
(09:13):
the front end of the entire solution.
To get from stage four to stage five,
you have to shift your focus from making
money to building a business that makes money.
This simple mindset shift helps you stop focusing
on the tyranny of the urgent, which is
making money to pay today's bills and get
you more focused on the priority of the
important, building a business that makes money when
(09:33):
you are not there.
The fundamental shift is that the business owner
must realize a sustainable business is rarely built
on the production of the owner.
It can be built on the talent of
the owner or the vision of the owner.
But if the owner is the one making
the chairs and hasn't been dual tracking, which
we explained in an earlier podcast, the owner
will be trapped in stage four stability.
(09:54):
The owner has to learn to resist leading
the charge to make the money to pay
the bills and figure out how to get
the business to do it for them.
And you don't have to figure this out
all at once.
If you can figure out how to get
Wednesday afternoon off while the business makes money,
you have unlocked the door to being gone
a full day each week and then a
couple and then a week or two, and
the business will still make money when you're
not there.
(10:14):
But part of this mindset is dealing with
the most common of business diseases.
I've come to call a bad case of
the nobody's.
Nobody's as committed as I am.
Nobody's as invested.
Nobody's as experienced.
Nobody's as knowledgeable.
Nobody cares like I do.
Nobody, nobody, nobody.
As Henry Ford said, if you think you
(10:34):
can or you think you can't, you're right.
Until you get past your bad case of
the nobody's, you will never get past stage
four stability.
You will be a hostage in your business.
And the only freedom you can hope for
is to sell the damn thing so you
can get freedom from your business because you
never had any freedom in it.
I know this from experiencing it personally and
(10:56):
watching countless other business owners experience it.
Stage five success is not for the lucky
or the smart.
It is for the intentional.
If you change your mindset and move from
intending to make money to intending to build
a business that makes money when you're not
there, you will become a 5% who
has freedom in their business and you can
(11:17):
use it to build your own ideal lifestyle.
I say this all the time.
We get what we intend, not what we
hope for.
Are you intending to make money or are
you experiencing the big mindset shift so that
you intend to build a business that makes
money when you are not there?
If so, you are well on your way
to freedom in your business.
With that big mindset shift driving us in
stage five success, the focus shifts from being
(11:39):
the producer to building processes so others can
produce when you're not there.
Barbara Corcoran, one of the successful Shark Tank
entrepreneurs, said her business never really took off
until she made peace with the fact that
no one was going to be her and
that hiring and training others to follow processes
that reflected what she wanted was the only
way to build a business that made money
(11:59):
when she wasn't there.
She got over her bad case of the
nobodies.
In stage five, the owner is now profitable
in both money and time because she has
gotten the assembly process out of her head,
through her heart, out her hands onto a
piece of paper or a computer, and then
teaches others how to do the production.
Stakeholders know what to do, how to do
(12:20):
it, when to do it, and what it
should look like when they're done.
And they come to work every day clear
on how they fit into the big picture.
This is key to getting off the treadmill
and the operative emotions are around freedom and
realizing the business depends on me less and
less.
But most business owners drag stage five out
for years when it should only take months.
Why?
(12:41):
I think it's because they are too busy
with the tyranny of the urgent to get
to the priority of the important.
They're too busy making money today, tyranny of
the urgent, to build a business that makes
money tomorrow, priority of the important.
In a future podcast or two, we will
talk about how to practically tactically create processes
that give you freedom and everyone else clarity
about how to deliver exactly what you would
(13:01):
deliver if you were there.
We call it freedom mapping.
Freedom mapping is where the road meets the
road.
If you want to build a mature business
and get off the treadmill, freedom mapping is
the simple, elegant solution that has worked for
so many.
Look for it in a future podcast.
So let's say you're at stage five success
and have a business that regularly and reliably
produces both time and money for you, not
(13:24):
just money.
Welcome to the 5%.
You're no longer average.
You're normal.
Make sure you tell your friends you're not
smarter or luckier than they are, but that
you just went through the big mindset shift
and intended to build a business that makes
money instead of having it all dependent on
your presence.
For the first time, you are actually off
(13:46):
the treadmill, which is why we call it
stage five success.
Stage five success welcomes you not as an
income producer, but as an actual business owner
who is no longer owned by your business.
It also offers the beginnings of wealth, the
freedom and the ability to choose what to
do with my time and my money.
(14:06):
I couldn't blame a business owner for wanting
to play it safe and stop at stage
five stability either, but there's a lot more
freedom at the next stage if the owner
is interested in going there.
In stage five, you finally experience some freedom
in your business.
But stage six ownership is where it starts
to get really interesting.
The risks to get there are very minimal
compared to the risk muscles you had to
build in stages one through four.
(14:28):
It's, again, more about intention than anything else.
Let's not settle.
Let's stay curious and grow and experience more
freedom.
How do we know we're really in stage
six significance?
Only one thing changes from stage five stability
to stage six significance.
You're now focusing on leadership, not on managing,
(14:48):
not on managing processes or people.
You are leading through others.
You're no longer the one who is responsible
for creating processes, training people and managing the
day to day.
You are largely focused on what we say
is the highest and best use of your
time and talents.
You're doing what you love more and more
in the business and outside of it.
And you're not experiencing freedom to follow your
(15:10):
passions, do the things you love and answer
that old question, if you had all the
time and money you needed, what would you
be doing right now?
We call stage six significance just that because
it frees you to focus on building a
life of significance, using your business to get
you there.
This is the fun stuff.
We are now back to the passion that
(15:31):
brought us into business in the first place.
Just about every business owner would love to
be in a position to have the time
and the money, which again is wealth, to
think about how to have an impact in
the world beyond just selling our widgets.
Stage six significance is that place.
The operative emotion in stage six significance is
others are finally in place and managing this.
(15:52):
I'm free.
Remember our definition of wealth, the freedom and
the ability to choose what to do with
my time and my money.
We're really experiencing wealth in spades now.
More money is actually resulting in more time.
This is the reward for intentionally moving from
stage one to stage six and we should
toast our success.
Leadership in place is the focus in stage
(16:12):
six significance and it's really important that we
understand that leadership in place is not leadership
in charge just yet.
Stage six is the second most dangerous stage
behind stage four.
It's dangerous from the perspective that since we
have leaders in place, we think we can
now go directly to the golf course and
work on lowering our handicap.
(16:32):
Jerry Hodgkin's story might slow you down a
bit.
Jerry invested a number of years building a
very successful direct mail company.
He bootstrapped it through all the stages, sweated
out the hard early years and pulled the
business kicking and screaming into stage six significance.
Jerry finally had leaders in place and was
enjoying his newfound freedom guy status.
(16:53):
He loved vintage race cars and decided he
would reward himself by turning his attention fully
to racing.
He checked in with his business regularly but
became devoted to the cars.
Not more than a year after entering stage
six significance, Jerry had to shut the business
down.
He had gotten ahead of himself and learned
the hard way that leadership in place isn't
(17:13):
nearly as good as leadership in charge.
Jerry had mistaken leadership of his own for
abdication.
Leadership stays in touch and knows what's going
on all the time and has invested enough
time and energy into the other leaders that
they are willing to be honest and transparent
if things aren't going well.
Abdication says, you guys run this, I'll be
(17:35):
on the golf course.
In stage six significance, the owner can focus
on giving the business two things, vision and
guidance.
The problem comes when you want to skip
the guidance part and head for the hobby.
After all, you think I'm paying this leader
good money and I expect confidence, but they
are not you yet and you have to
(17:56):
turn them into you.
A hired gun is one thing, a loyal
servant leader in your business who has passion
for your customers and your stakeholder is quite
another.
They have to catch this from you being
there and instilling it in them.
More is caught than taught.
Bring them alongside so that they can watch
you lead and catch that from you.
(18:17):
Then you can go play with your cars.
One of the problems of heading for the
golf course too soon is that the leader
you left in place who really isn't in
charge yet will report back regularly that things
are great.
Jerry checked in regularly to make sure things
were going well and his leaders always provided
rosy projections and said great things about the
operation.
What else would they say?
(18:38):
I'm scared.
I don't know what I'm doing.
Some big customers are mad and I'm not
sure how to solve any of it.
No, your leader in place knows you hired
them to be competent and they are going
to pretend to be that as long as
they can.
Now your job is to build trust with
the leaders, train the leaders and instill in
them the pride of being in charge and
(18:59):
then guide them through the day-to-day
until the culture of the company becomes a
part of them.
They'll have a lot to learn.
It took years for you, the owner, to
figure it all out so I don't expect
your leader can get there in a blink
of an eye.
Head for the golf course too soon and
you might just lose everything you worked for.
Stick in there for a little bit, make
sure you pass it along and you'll have
something special, a business that somebody else will
(19:19):
want to buy and you will never want
to sell.
Okay, stage 7 succession.
You finally made it.
You've invested the time to move from leadership
in place, stage 6, to leadership in charge,
stage 7.
From giving both vision and guidance in stage
6 to giving only vision in stage 7.
The stage 6 in place leader now truly
(19:41):
has the range to also be in charge
in stage 7 and can now guide the
ship as long as you communicate clearly where
you want to go.
You only have to communicate the vision now
because the leader knows how to execute and
you've built a trusting relationship resulting in full
transparency between the two of you.
The operative emotion in stage 7 are a
(20:01):
growing sense of significance, accomplishment, and satisfaction at
having built the dream.
Warren Buffett buys stage 7 succession businesses and
tells the leaders he doesn't want to hear
from them very often and if he does,
that's a problem.
In stage 7, if you want it, this
can also be the extent of your direct
leadership as well.
To me, the first interpretation of success is
(20:22):
never, how do I sell this thing?
Succession simply means you become the myth.
When you walk in every few weeks or
once a quarter or less often, somebody whispers,
hey, that's the woman who started it.
We build a business that gives us freedom
in every way and selling it is the
farthest thing from our mind.
(20:42):
We just become the myth.
Okay, as we wrap up, let's look back.
It's possible that right now, if your business
is in stage 2 through 4 or even
5, you're saying to yourself, yeah, wouldn't that
be nice, but without the conviction that this
could actually be you.
I'll say it again.
I can't think of any reason why you
can't get here except for one.
You really don't intend to.
(21:04):
This is not a gifted person's game.
It is an intentional person's game and it's
not specific to any profession or industry.
Ask the right question and you will figure
out the answer.
I'll say it again.
You get what you intend, not what you
hope for.
So the right question is, how do I
build a mature business and when do I
want to get there?
This isn't about building a multi-million dollar
(21:25):
business with dozens of stakeholders unless that's what
you're shooting for.
This is about creating the lifestyle that you
want for you and your family.
You can do that with almost any size
business and you can do it even without
stakeholders.
More on that at another time.
Building a mature business isn't about preparing it
to sell and get the heck out.
It's about building a business that serves you,
(21:46):
that creates the lifestyle you want.
It's about building a platform for significance that
allows you to serve your community and gives
you the freedom to travel, golf, volunteer or
pursue whatever other bird you have in your
saddle that takes time, money and energy.
It's about creating freedom and the choice to
build the life of significance that you want,
even starting more businesses like I have.
(22:07):
If selling your mature business gives you more
freedom than keeping it, then by all means
sell it.
But I've worked with a lot of business
owners who started out saying, let's get this
profitable so I can sell the damn thing
and get the heck out.
And after they get there, I remind them
of this and many times the response has
been, are you crazy?
I'm having too much fun.
I understand the desire to sell and get
(22:28):
out when things are tough in stages two
through four, but it's possible you'll feel differently
once you get your business ownership to stage
five success or higher.
Okay, in our next podcast, I'll share some
things that thousands of us have learned in
the last few decades about how the seven
stages of business ownership actually work in the
real world.
I'll see you there.
(22:49):
Keep going.
That wraps up another episode of the Get
Off The Treadmill podcast.
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(23:11):
workshop leader, you can contact us at grow,
G-R-O-W, at cranksetgroup.com.
Until next time, have a great week.
Welcome back to the Get Off The Treadmill
podcast for small business owners and entrepreneurs, where
we show you how to build a successful
business and to have a life too.
We're going to dive into another topic that
helps us make more money in less time
and to get off the treadmill so we
can experience a life of significance.
And now your host and the author of
(00:25):
the number one bestselling business book, Making Money
Is Killing Your Business, Chuck Blakeman.
Hi, Chuck Blakeman here again with you today.
We're going to talk about the seven stages
of business ownership, part two, that big mindset
shift.
In our last podcast, we walked through the
first four of the seven stages of business
ownership, the first four stages that got us
(00:47):
on the treadmill.
Today we're going to talk about the last
three stages, which are the three stages that
get us off the treadmill.
This is a standalone podcast, but you might
get more out of this one if you
checked out part one of the seven stages
first.
And I want to reemphasize this about the
seven stages of business ownership.
It's not about the stages of business.
I'm focusing on how our business affects us,
(01:08):
which is a major reason why I'm in
business to get where I want to be
personally.
Let's speed through those first four stages just
to set up the last three.
Stage one startup is before you spend a
nickel and are getting your ducks in a
row.
And it's the what fun stage of business.
Stage two survival starts when you pay your
first bill and aren't profitable yet, and the
business is starting to suck the life out
(01:30):
of you in both time and money.
Your emotions change from what fun to I
didn't think it would be this hard.
You're in stage three when you finally break
even regularly, and you've learned the bad habit
of being on the production treadmill.
Stage four stability is when you are finally
making a profit regularly, can buy a hot
tub and maybe even a boat for your
family and other people to use.
(01:52):
Because you finally have money, but you probably
have very little time and you are now
officially a hostage to your business.
You thought you were building a company, but
instead you built yourself a job.
Welcome to stage four.
Well, most people stop when they reach stage
four stability, not because they have to, but
because they've never thought there was anything beyond
that.
In the last podcast, we identified stage four
(02:13):
stability as the American dream, which we sadly
have exported all over the world.
But it's really the American nightmare.
Stage four stability is the most dangerous stage
in business because for the first time you
finally have something to protect, profit.
And our instinct is to protect that with
every fiber of our being.
Unfortunately, that very understandable desire to protect the
(02:36):
great thing you've built is the Trojan horse
from within that will ensure you never get
off the hostage treadmill.
And you will very likely yo-yo between
stages two, three and four on a regular
basis for 30 years.
Your desire to protect your business will give
you the opposite of what you want.
I did this multiple times in multiple businesses,
but protecting what I had never got me
(02:57):
to what I really wanted, which was freedom
in my business.
As a result, stages one through four are
the only stages most business owners ever experience.
Not because it's extremely hard to get to
stage five or beyond.
I personally think it's harder to get from
stage two to stage three, but because we
simply don't intend to build a mature business
that gets to stage five and beyond.
(03:17):
We never thought it was possible because the
American dream illogically tells us that being a
hostage to your business is just the price
you pay for freedom.
Really?
Ironically, we truly do get what we intend
and too often we intend to be hostages
of our businesses for 30 years.
So what intention is needed to get to
stage five and beyond?
First, we need to decide what we want.
(03:38):
Not what our business wants, but what we
want as a result of being in business.
Stephen Covey said, start with the end in
mind.
What does freedom in your business look like
to you a few years from now or
even next year?
Until we know that we're operating on the
random hope strategy of business, you know, I'm
going to work really hard and I hope
something good happens.
We'll expand on this in a future podcast
(03:59):
on the significance quotient and how the three
main resources in life, time plus money plus
energy, give you the freedom to build a
life of significance.
In an earlier podcast, we've talked about building
a mature business and we defined it as
a business where you're no longer the only
producer and maybe not even one of many
producers and the business makes money when you
(04:20):
are not there.
That's my Stephen Covey end in mind.
That's what I want from my business, from
any business.
I want a mature business that makes more
money in less time so I can have
ongoing freedom in my business, not from it.
It's up to you to describe what a
mature business means to you.
I would encourage you though to use the
above two benefits as the baseline for business
(04:41):
maturity, making more money in less time so
you can have freedom in your business, not
from it.
Anything less, I don't think you're still on
the treadmill.
It's especially important to remember that business maturity
really isn't about the business at all.
It's about you and the lifestyle the business
produces for you.
On the back cover of my first book,
Making Money is Killing Your Business, we splashed
(05:02):
the message, use your business to build your
ideal lifestyle.
The only way to really know that your
business is mature is if you are living
the way you want to as a result
of owning it.
The size of your business and how much
money it makes doesn't matter if your lifestyle
sucks.
It's the lifestyle you are experiencing that tells
you that your business is mature.
(05:23):
Over the 13 businesses I built, I've learned
the hard way that making money is not
an empowering vision.
I know plenty of people who have tried
it, including me, to build a business that
provides the lifestyle you want.
You need a vision that motivates you, real
clarity about what your life looks like when
you've arrived.
A friend of mine does business advisory and
had a client who told him after 150
(05:44):
,000, it didn't make me any happier to
make 500,000.
I've had my business advisory client say the
same thing.
Some people push the numbers up or down,
but you get the point.
Money never makes life more meaningful all by
itself.
It's a resource, not a goal.
It means to the end, never the end
in and of itself.
So while making money doesn't make life meaningful
(06:04):
all by itself, what we can do with
it can make life very meaningful for us
when we combine it with the other two
resources of free time and great energy.
A successful business owner eventually figures this out.
Making money is not an empowering vision.
Neither is a lifestyle being trapped as an
employee of yourself.
(06:24):
Either way, if you want to be successful,
you're going to need to figure out how
to build a business that makes money when
you are not there.
So let's talk about moving from stage four
stability to stage five success.
In stage four, we finally have profit, maybe
even millions we can take home.
But we still don't have the time and
freedom to use it the way we want.
We're still hostages to our business.
(06:46):
You know you are finally in stage five
when your business is regularly giving you both
time and money, not just money.
You can regularly be away from the business
every Friday or Wednesday afternoon or both and
take a couple of weeks vacation and not
work while you're away.
And it's not just about being able to
escape from a hostage situation for a day
(07:06):
or a week.
The key to stage five stability is that
while you are away, the business makes money
without you.
Anybody can take Friday off and lose money
while they're not working.
I've done it.
This is not a stage five business.
Are you able to go away for a
day, a week or two or even a
month?
And when you come back, there's more money
in the bank than when you left.
(07:27):
That's a stage five success business.
That's what I experienced in February of 2011
when we went to New Zealand for a
month for our business maturity vacation.
When we got back, revenue and profit were
higher than when we left.
My anecdotal research tells me probably less than
5% of business owners ever take the
small measured risk to move from stage four
(07:47):
stability to stage five success.
That 5% marker might make us all
feel that a mature business that gives us
freedom in our business, not from it, is
for either the smart or the lucky.
But that is not my experience.
I have regularly witnessed business owners who are
on the stage four treadmill for even decades
who were able to get off of it
and jump to stage five or beyond in
(08:08):
a year or less simply because they changed
one thing, their mindset.
They were no smarter or no luckier than
they had been for decades.
They simply changed their intention and experienced what
we call the big mindset shift.
The big mindset shift looks like this.
In stage four stability, our mindset is still
the same as it was in stages one
(08:29):
through three.
I am making money.
To get the stage five success, the mindset
shifts subtly and yet radically from I am
making money to I'm building a business that
makes money.
Let me repeat that.
A shift from I'm making money to I'm
building a business that makes money.
Do you see the subtle radical difference?
(08:51):
In stage four, I still think I'm necessary
in order for the business to make money.
In stage five success, we become more like
Richard Branson.
We begin to realize this business could and
should make money when we're not there.
When we come to the end of ourselves
and we realize we can't be the business,
everything changes.
I can't overemphasize this concept.
It's the crux of the whole problem and
(09:13):
the front end of the entire solution.
To get from stage four to stage five,
you have to shift your focus from making
money to building a business that makes money.
This simple mindset shift helps you stop focusing
on the tyranny of the urgent, which is
making money to pay today's bills and get
you more focused on the priority of the
important, building a business that makes money when
(09:33):
you are not there.
The fundamental shift is that the business owner
must realize a sustainable business is rarely built
on the production of the owner.
It can be built on the talent of
the owner or the vision of the owner.
But if the owner is the one making
the chairs and hasn't been dual tracking, which
we explained in an earlier podcast, the owner
will be trapped in stage four stability.
(09:54):
The owner has to learn to resist leading
the charge to make the money to pay
the bills and figure out how to get
the business to do it for them.
And you don't have to figure this out
all at once.
If you can figure out how to get
Wednesday afternoon off while the business makes money,
you have unlocked the door to being gone
a full day each week and then a
couple and then a week or two, and
the business will still make money when you're
not there.
(10:14):
But part of this mindset is dealing with
the most common of business diseases.
I've come to call a bad case of
the nobody's.
Nobody's as committed as I am.
Nobody's as invested.
Nobody's as experienced.
Nobody's as knowledgeable.
Nobody cares like I do.
Nobody, nobody, nobody.
As Henry Ford said, if you think you
(10:34):
can or you think you can't, you're right.
Until you get past your bad case of
the nobody's, you will never get past stage
four stability.
You will be a hostage in your business.
And the only freedom you can hope for
is to sell the damn thing so you
can get freedom from your business because you
never had any freedom in it.
I know this from experiencing it personally and
(10:56):
watching countless other business owners experience it.
Stage five success is not for the lucky
or the smart.
It is for the intentional.
If you change your mindset and move from
intending to make money to intending to build
a business that makes money when you're not
there, you will become a 5% who
has freedom in their business and you can
(11:17):
use it to build your own ideal lifestyle.
I say this all the time.
We get what we intend, not what we
hope for.
Are you intending to make money or are
you experiencing the big mindset shift so that
you intend to build a business that makes
money when you are not there?
If so, you are well on your way
to freedom in your business.
With that big mindset shift driving us in
stage five success, the focus shifts from being
(11:39):
the producer to building processes so others can
produce when you're not there.
Barbara Corcoran, one of the successful Shark Tank
entrepreneurs, said her business never really took off
until she made peace with the fact that
no one was going to be her and
that hiring and training others to follow processes
that reflected what she wanted was the only
way to build a business that made money
(11:59):
when she wasn't there.
She got over her bad case of the
nobodies.
In stage five, the owner is now profitable
in both money and time because she has
gotten the assembly process out of her head,
through her heart, out her hands onto a
piece of paper or a computer, and then
teaches others how to do the production.
Stakeholders know what to do, how to do
(12:20):
it, when to do it, and what it
should look like when they're done.
And they come to work every day clear
on how they fit into the big picture.
This is key to getting off the treadmill
and the operative emotions are around freedom and
realizing the business depends on me less and
less.
But most business owners drag stage five out
for years when it should only take months.
Why?
(12:41):
I think it's because they are too busy
with the tyranny of the urgent to get
to the priority of the important.
They're too busy making money today, tyranny of
the urgent, to build a business that makes
money tomorrow, priority of the important.
In a future podcast or two, we will
talk about how to practically tactically create processes
that give you freedom and everyone else clarity
about how to deliver exactly what you would
(13:01):
deliver if you were there.
We call it freedom mapping.
Freedom mapping is where the road meets the
road.
If you want to build a mature business
and get off the treadmill, freedom mapping is
the simple, elegant solution that has worked for
so many.
Look for it in a future podcast.
So let's say you're at stage five success
and have a business that regularly and reliably
produces both time and money for you, not
(13:24):
just money.
Welcome to the 5%.
You're no longer average.
You're normal.
Make sure you tell your friends you're not
smarter or luckier than they are, but that
you just went through the big mindset shift
and intended to build a business that makes
money instead of having it all dependent on
your presence.
For the first time, you are actually off
(13:46):
the treadmill, which is why we call it
stage five success.
Stage five success welcomes you not as an
income producer, but as an actual business owner
who is no longer owned by your business.
It also offers the beginnings of wealth, the
freedom and the ability to choose what to
do with my time and my money.
(14:06):
I couldn't blame a business owner for wanting
to play it safe and stop at stage
five stability either, but there's a lot more
freedom at the next stage if the owner
is interested in going there.
In stage five, you finally experience some freedom
in your business.
But stage six ownership is where it starts
to get really interesting.
The risks to get there are very minimal
compared to the risk muscles you had to
build in stages one through four.
(14:28):
It's, again, more about intention than anything else.
Let's not settle.
Let's stay curious and grow and experience more
freedom.
How do we know we're really in stage
six significance?
Only one thing changes from stage five stability
to stage six significance.
You're now focusing on leadership, not on managing,
(14:48):
not on managing processes or people.
You are leading through others.
You're no longer the one who is responsible
for creating processes, training people and managing the
day to day.
You are largely focused on what we say
is the highest and best use of your
time and talents.
You're doing what you love more and more
in the business and outside of it.
And you're not experiencing freedom to follow your
(15:10):
passions, do the things you love and answer
that old question, if you had all the
time and money you needed, what would you
be doing right now?
We call stage six significance just that because
it frees you to focus on building a
life of significance, using your business to get
you there.
This is the fun stuff.
We are now back to the passion that
(15:31):
brought us into business in the first place.
Just about every business owner would love to
be in a position to have the time
and the money, which again is wealth, to
think about how to have an impact in
the world beyond just selling our widgets.
Stage six significance is that place.
The operative emotion in stage six significance is
others are finally in place and managing this.
(15:52):
I'm free.
Remember our definition of wealth, the freedom and
the ability to choose what to do with
my time and my money.
We're really experiencing wealth in spades now.
More money is actually resulting in more time.
This is the reward for intentionally moving from
stage one to stage six and we should
toast our success.
Leadership in place is the focus in stage
(16:12):
six significance and it's really important that we
understand that leadership in place is not leadership
in charge just yet.
Stage six is the second most dangerous stage
behind stage four.
It's dangerous from the perspective that since we
have leaders in place, we think we can
now go directly to the golf course and
work on lowering our handicap.
(16:32):
Jerry Hodgkin's story might slow you down a
bit.
Jerry invested a number of years building a
very successful direct mail company.
He bootstrapped it through all the stages, sweated
out the hard early years and pulled the
business kicking and screaming into stage six significance.
Jerry finally had leaders in place and was
enjoying his newfound freedom guy status.
(16:53):
He loved vintage race cars and decided he
would reward himself by turning his attention fully
to racing.
He checked in with his business regularly but
became devoted to the cars.
Not more than a year after entering stage
six significance, Jerry had to shut the business
down.
He had gotten ahead of himself and learned
the hard way that leadership in place isn't
(17:13):
nearly as good as leadership in charge.
Jerry had mistaken leadership of his own for
abdication.
Leadership stays in touch and knows what's going
on all the time and has invested enough
time and energy into the other leaders that
they are willing to be honest and transparent
if things aren't going well.
Abdication says, you guys run this, I'll be
(17:35):
on the golf course.
In stage six significance, the owner can focus
on giving the business two things, vision and
guidance.
The problem comes when you want to skip
the guidance part and head for the hobby.
After all, you think I'm paying this leader
good money and I expect confidence, but they
are not you yet and you have to
(17:56):
turn them into you.
A hired gun is one thing, a loyal
servant leader in your business who has passion
for your customers and your stakeholder is quite
another.
They have to catch this from you being
there and instilling it in them.
More is caught than taught.
Bring them alongside so that they can watch
you lead and catch that from you.
(18:17):
Then you can go play with your cars.
One of the problems of heading for the
golf course too soon is that the leader
you left in place who really isn't in
charge yet will report back regularly that things
are great.
Jerry checked in regularly to make sure things
were going well and his leaders always provided
rosy projections and said great things about the
operation.
What else would they say?
(18:38):
I'm scared.
I don't know what I'm doing.
Some big customers are mad and I'm not
sure how to solve any of it.
No, your leader in place knows you hired
them to be competent and they are going
to pretend to be that as long as
they can.
Now your job is to build trust with
the leaders, train the leaders and instill in
them the pride of being in charge and
(18:59):
then guide them through the day-to-day
until the culture of the company becomes a
part of them.
They'll have a lot to learn.
It took years for you, the owner, to
figure it all out so I don't expect
your leader can get there in a blink
of an eye.
Head for the golf course too soon and
you might just lose everything you worked for.
Stick in there for a little bit, make
sure you pass it along and you'll have
something special, a business that somebody else will
(19:19):
want to buy and you will never want
to sell.
Okay, stage 7 succession.
You finally made it.
You've invested the time to move from leadership
in place, stage 6, to leadership in charge,
stage 7.
From giving both vision and guidance in stage
6 to giving only vision in stage 7.
The stage 6 in place leader now truly
(19:41):
has the range to also be in charge
in stage 7 and can now guide the
ship as long as you communicate clearly where
you want to go.
You only have to communicate the vision now
because the leader knows how to execute and
you've built a trusting relationship resulting in full
transparency between the two of you.
The operative emotion in stage 7 are a
(20:01):
growing sense of significance, accomplishment, and satisfaction at
having built the dream.
Warren Buffett buys stage 7 succession businesses and
tells the leaders he doesn't want to hear
from them very often and if he does,
that's a problem.
In stage 7, if you want it, this
can also be the extent of your direct
leadership as well.
To me, the first interpretation of success is
(20:22):
never, how do I sell this thing?
Succession simply means you become the myth.
When you walk in every few weeks or
once a quarter or less often, somebody whispers,
hey, that's the woman who started it.
We build a business that gives us freedom
in every way and selling it is the
farthest thing from our mind.
(20:42):
We just become the myth.
Okay, as we wrap up, let's look back.
It's possible that right now, if your business
is in stage 2 through 4 or even
5, you're saying to yourself, yeah, wouldn't that
be nice, but without the conviction that this
could actually be you.
I'll say it again.
I can't think of any reason why you
can't get here except for one.
You really don't intend to.
(21:04):
This is not a gifted person's game.
It is an intentional person's game and it's
not specific to any profession or industry.
Ask the right question and you will figure
out the answer.
I'll say it again.
You get what you intend, not what you
hope for.
So the right question is, how do I
build a mature business and when do I
want to get there?
This isn't about building a multi-million dollar
(21:25):
business with dozens of stakeholders unless that's what
you're shooting for.
This is about creating the lifestyle that you
want for you and your family.
You can do that with almost any size
business and you can do it even without
stakeholders.
More on that at another time.
Building a mature business isn't about preparing it
to sell and get the heck out.
It's about building a business that serves you,
(21:46):
that creates the lifestyle you want.
It's about building a platform for significance that
allows you to serve your community and gives
you the freedom to travel, golf, volunteer or
pursue whatever other bird you have in your
saddle that takes time, money and energy.
It's about creating freedom and the choice to
build the life of significance that you want,
even starting more businesses like I have.
(22:07):
If selling your mature business gives you more
freedom than keeping it, then by all means
sell it.
But I've worked with a lot of business
owners who started out saying, let's get this
profitable so I can sell the damn thing
and get the heck out.
And after they get there, I remind them
of this and many times the response has
been, are you crazy?
I'm having too much fun.
I understand the desire to sell and get
(22:28):
out when things are tough in stages two
through four, but it's possible you'll feel differently
once you get your business ownership to stage
five success or higher.
Okay, in our next podcast, I'll share some
things that thousands of us have learned in
the last few decades about how the seven
stages of business ownership actually work in the
real world.
I'll see you there.
(22:49):
Keep going.
That wraps up another episode of the Get
Off The Treadmill podcast.
If you found this podcast helpful, please subscribe
and hit the like button to ensure you
are receiving the latest tools you need to
grow your business and to get off the
treadmill.
If you want more information on the 3
to 5 Club, the Crankset Group, or to
book Chuck as a business advisor, speaker, or
(23:11):
workshop leader, you can contact us at grow,
G-R-O-W, at cranksetgroup.com.
Until next time, have a great week.
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