Along the way, I noticed the climb every entrepreneur is scaling with no exception. Some started, then gave up. Others made some progress, and then they stopped. Several are still climbing.
Over the years, I’ve identified 4 key milestones along that difficult climb. I even gave this process a name–The Owner’s Entrepreneurial Ladder™. I share this concept with every new client through my branded practice, G3CFO.
The Owner’s Entrepreneurial Ladder™ has gone through multiple iterations. The first iteration included the owner needing or wanting more money at the base of the ladder.
Needing and wanting are two different verbs. The current iteration of this important concept breaks out want of money from need of money. The separation is far from subtle.
Every small business entrepreneur needs money to survive. My stomping ground in Columbia, Missouri includes hundreds of businesses needing money. They make money, but they seem to never get ahead. The vicious cycle of spending-earning-spending-earning continues with the money pile never growing.
Climbing The Owner’s Entrepreneurial Ladder™ means owners and CEOs have to figure out how to free themselves from the need of money. Some figure it out. Some never do.
Wanting money? Seems so materialistic, doesn’t it?
Then again, here’s betting most of the CEOs we serve still live modest lifestyles. Most get up in the morning not saying, “I can’t wait to make more money.” That’s far from the truth.
What gets them out of bed is the love of their business. They care about their customers, their employees, and the supplier relationships they’ve built over the years. Money is a byproduct of building a great business that grows and prospers in spite of the founder.
Yes, they appreciate the money, but most will say there comes a point where that extra you-fill-in-the-blank-amount is no longer motivating.
And that leads us to the next milestone or rung on The Owner’s Entrepreneurial Ladder™.
Our CEO-founder has just crossed two major milestones. They no longer worry about meeting next week’s payroll. The bank is moderately disappointed the LOC goes mostly unused until each new buying season for next year’s retail merchandise. Paying personal income taxes is still frustrating, but the cash is always there to keep funding Uncle Sam. In the past it was a scramble to pay taxes, which also meant borrowing money from the bank to cover the liability.
Furthermore, the CEO-founder’s personal net worth has grown so much, she is now investing in other small but profitable ventures. Her real estate portfolio is rock solid. In short, her outside investments will be spitting out cash like an ATM machine run amok for years to come.
There’s one problem with this picture. Too much time is spent at the office.
Accordingly, the next milestone on The Owner’s Entrepreneurial Ladder™ is more time. About once per year, I ask my gold-tier clients if they could take three months off and the business be as good or even better when they got back.
When I first started asking this question, most would say 2-3 weeks is the most they could take off. Even then, they would be calling into the office or checking email.
Currently, I have a client who about two years earlier said he could leave for three months, and the business would still be humming along. I thought his answer was wrong. I thought longer.
Recently, he conveyed he could take a year off, and the business might even be better. Bingo. That CEO has met this third milestone along The Owner’s Entrepreneurial Ladder™.
Few Make it to The Final Milestone – More Meaning
Business is merely a means to an end. It’s not the endgame in life. Yet, I find way too many entrepreneurs whose entire identities are wrapped around the businesses they have created. Take away the business and the entrepreneur’s way is lost.
A business should serve owners, not the other way around. If so, then the entrepreneur has become a slave to their business, even when it’s making them wealthy.
My biggest frustration with this final milestone is that I cannot help the CEO once they reach this rung. They have to figure it out for themselves. Some do, and you can see the impact they are making on their communities and far beyond. If you are searching for examples, R.G. LeTourneau quickly comes to mind. He’s a hero in my book.
Unfortunately, many never figure this one out. I’m now at an age where I can easily spot the void in a CEO-founder when I sense something is missing from their lives. They have so much, yet so very little. Can you relate to what I’m writing?
As CFOs, We Can Make a Difference
I share The Owner’s Entrepreneurial Ladder™ to many of my new clients because I want to show them the endgame. Incidentally, they get it.
But there’s a second reason I share it. I go over this simple mental model or concept because it reminds me of my never-ending job:
- Needing money – that one is easy. We’re hired to solve problems, and most of those are tied to money issues. Sometimes, this fix takes weeks or months, but there’s always an end in sight.
- Wanting money – this one is not as easy, but it require a simple plan. An owner’s net worth begins to grow when the business model is sound, efficient, and includes a WOW! factor or two. Being part of this solution is probably my favorite part of CFO work.
- More time – again, not that easy. If an owner wants more time, they need to let go. To let go means they need a team they can trust and rely on. You and I know the keys to success and what needs to be done. Execution, though, is hard. Really hard.
- More meaning – sorry, I can’t help. I’m not a priest. I’m not a sage, I’m just a guy who cares and listens. Still, the founder has to figure this one out on their own. And when they do, I’ll continue to be their biggest cheerleader and supporter.
More money (from need to want), more time, more meaning. Those are the milestones on The Owner’s Entrepreneurial Ladder™.