I just wrote this article for my syndicated list and thought I’d share it with you all. Enjoy!
The Three Levels of Building a Thriving Business Worth Millions
Over the past decade I’ve had the privilege of working with over 100,000 entrepreneurs. They all dreamed of building a successful business. But what most of them never realized is that building a successful business means that they needed to build a business that didn’t require that they be there each day to run it.
I’m about to share with you what I consider to be the single most important business lesson I’ve ever learned. It is my sincere desire that you use this information to build your business the way you really want.
The Three Levels of Building a Thriving Business
What does owning a business mean to you? Is it a way to create job protection for yourself so you can never be downsized or made technologically redundant? Or is it a way to follow your dream or passion, or is it a way to make yourself financially free?
And what does being an entrepreneur feel like to you? Does it feel risky, like you’ll have to step outside of your comfort zone and launch a new, untested business idea? Does it mean long hours, employee hassles, and lots of risk? Do you think you’ll find yourself wondering if you made the right decision, or whether staying in the W-2 workforce would have been a better choice?
If you have found that running a business isn’t freedom at all, that it’s even more work and hassle than a regular job, chances are your past experiences have all been with Level One or Level Two businesses.
Level One: No Control, No Freedom
A Level One business is a fledgling company. It’s really the beginning point of a business. At this point not only do you have little freedom (you’re working long hours to get your business launched) but you have little control.
Level Two: Control, But No Freedom
A Level Two business is a business that works, but it needs you the business owner to be there to make that business work. If you don’t show up to work, there is no money. It’s really not business ownership, so much as it is self employment.
You’ve now got the control, but with that control comes long hours and the sense that all of the decisions, all of the risks, all of the responsibility—all of it—rests on your shoulders. Every day you have to prove yourself and keep going because if you stop, it all ends.
You have the control, but no real freedom.
Level Three: Total Control, Total Freedom
A Level Three business is one where your business runs without you needing to be there each day. A Level Three business is a business that operates smoothly, efficiently, and profitably without being dependent on any one person—including you the owner—needing to be there to run it each day.
At Level Three you have real control over your business and you financial life. And you also enjoy real freedom. You can still work in your business, but now it’s a choice each day, not an obligation.
How One Business Owner Earns 7-Figures Annually – and Now Works HALF the Hours!
The real reason to build a Level Three investing business isn’t just to make the money. (Don’t get me wrong, I want you to enjoy the cash flow, but it’s just that real wealth is about more than just the money.)
Listen to how one of our clients Tom put it. Tom is a business owner in Florida with a spare computer parts business (he buys and sells a LOT of older, used computer equipment.) Tom shared with me via email:
“I’ve always been one of those driven people who believed in working hard to reach your goals. Before I began working with David and Stephen and the Maui program I had been fortunate enough to build a successful business and real estate portfolio that generated a seven-figure income. But I had to work long hours tied to my computer, phone, and email to do it… or so I thought. Using the Level Three approach (especially David’s time mastery strategies) I’ve reduced my working hours in half and still make the same income. Only now I don’t come in to the office until after 10am and take every Friday off to be with my family for the weekend. This sure feels a lot more like wealth and freedom to me. For anyone who owns a successful business I strongly recommend you use the Level Three business system to help you make it better. Who knows, you just might get your personal life back like I did.”
The Powerful Perspective Shift Necessary to Build a Level Three Business
The critical perspective shift that leads to true financial freedom and security and ultimately to a Maui lifestyle, is to see yourself not as a producer for your business, driving sales or fulfilling the purchases of your clients, but rather to see yourself as a business builder who is growing a business that will one day work without you needing to be there to run it.
You are only a temporary producer until you can build the business that can replace yourself.
In essence, you are the engineer, designing and building a profit machine that consistently kicks
out cash flow each and every month.
Target of Your Business:
To build a business that consistently creates value in the market and thus earns you a healthy profit without you needing to be there to run it.
Keep this goal firmly in mind and let it influence all the decisions you make and the actions you take.
Remember, the real reason you are putting in all the energy and time to build a business isn’t so you can make more money, although that will happen. The real reason to go to the effort of building your business is so that you can gain your freedom. You don’t want to spend all your time stuck managing and running your business. Yes you can make a ton of money doing this, but why not make the money and have the freedom too? Personally, we think that the only way you can really be secure and know that your income streams are secure is to have the business infrastructure in place to run it over time.
Level Two to Level Three Game Plan
Here is a quick bullet list of the key steps along the way to move a Level Two business to Level Three:
• Replace your fulfillment role in the company.
• Create systems to ensure quality doesn’t suffer as you pull out of your current role.
• Work on your company, not just in the company.
• Increase the sales and reach of the company.
• Continue refining the Level Three model for your business.
The Five Questions You Must Answer to Reach Level Three
Here are five questions to start you on your way to taking your business to Level Three.
Question One: What is the single most important “driver” in your business? A driver is the thing your business does that “drives” new business in the door. It could be a direct mail letter you mail to rented lists. It could be a website that has huge traffic. It could be your key word ad campaign. It could be your syndicated articles that you write for industry newsletters. It could be your referral base from past clients. It could be walk in traffic from a mall your store is situated in. It could be a display ad you run in your local paper.
What is the single most important driver in your business? When you get very clear on exactly what it is, then you can look for ways to systematize and automate it. Even better, you can look for ways you can expand or leverage it.
Question Two: What is the biggest bottleneck in your business? A bottleneck is a limiting factor. In your business, what (or who) is the biggest limiting factor in your business’s growth and success?
One way to spot a bottleneck is to ask yourself, if I could have more of any one thing, what one thing would I want more of to expand my business?
It could be more prospective customers coming into the front end of your business funnel, in which case your lead generation activities are your biggest bottleneck.
It could be more sales people to process and close all the leads you already have, in which case your lack of trained sales staff is your biggest bottleneck.
It could be more production capacity to handle more business in a quality manner, in which case your current production capacity is your biggest bottleneck.
Whenever you determine your biggest bottleneck, you can then focus your energies on how to push back that limiting factor so that it no longer limits your business. One way to look at growing your business is as a game of continually finding and pushing back bottlenecks.
Now in the context of creating a true Level Three business, you need to build the systems, team, technology, and outsourced solutions to help you push back your bottlenecks long term.
By the way, what do you think is the single most overlooked bottleneck in most entrepreneurial companies? YOU! That’s right, you the business owner are most often the real bottleneck. Look at your business, are you a the root of your company’s bottlenecks?
Question Three: Imagine you found out that you had one year left to work before you would be forced to stop working for the rest of your life (you could only check in for a MAXIMUM of ten hours per month.) You have 12 months to establish and grow your business to the place that at the end of those 12 months you couldn’t work in your business ever again (just check in for up to 10 hours per month), but you would be dependent on the business to provide you with steady cash flow to support yourself. What are the first three areas that immediately call out to you that you must focus on first?
In essence what this question is saying is how can you take your business to Level Three in the next 12 months. This is a very ambitious target for most business owners, but it’s a question that engages you. If it’s too much for you to imagine, change the time frame to 24 months, or 36 months.
Question Four: What three steps could you take in the next 30 days that would have the greatest impact on you hitting your goal of having a Level Three business by year’s end? Even if you can’t get that far in 12 months, the discipline of working on the highest return parts of your business will radically accelerate your progress to Level Three.
Final question…
Question Five: Who can you mastermind with to give you feedback and hold you accountable on your goal of building a Level Three business?
Too many entrepreneurs think they are all alone. Building a business in isolation is hard, grueling work. Building a business in association with a highly functioning mastermind team of other business owners in non-competitive businesses is fun, engaging, and infinitely more powerful.
I am not suggesting that you partner with these other business owners, just that you mastermind together and help each other reach your goal of Level Three. Truly there is power when you create a focused mastermind team to mutually support each other in your business aspirations.
I hope these ideas to build your business the right way make a difference in your business life and help you get to Level Three faster.
