To Attain Freedom as an Entrepreneur, Watch Out for These Three Pitfalls

Most people start their business because of the freedom they thought it will provide: freedom to earn what you deserve and to work for whoever you want, when you want, and from wherever you want. However, as time elapses business owner find they do not enjoy this freedom. From dealing with demanding customers to indecisive employees, the stress of running your business falls on your shoulder. The sad part of this is that business owners truly believe this is the only way business can be done. What they do not realize is that they are only one person and can do so much.

This article discusses the top 3 freedom killers in business. To get freedom in your business you have to learn how to allocate scarce resources to the right things in your business.

Freedom Killer 1 – Using too much energy fighting duds

Danny started his business because of his creativity. He started out part time helping friends and his website design company grew to 20 clients at which point Danny decided to go into his business full time. Danny had clients who paid him an average of $28,000 per year. To assist him with his client base, he hired 3 full time staff. From the outside looking in, it looks like Danny should be able to live his desired lifestyle. In fact, neighbors seeing him drive his BMW and talk about the big names he works with, thinks he has arrived. However, this could not be further from the truth. Danny knows how much he struggles to stay afloat once he gets to the office. He especially has one client who makes up 30% of his revenue and is very demanding. The client expects 24 hour service, never pays on time and does not seem to appreciate all the work Danny and his team does for him. Danny often pulls his staff from other projects to attend to the whims of this client. Danny’s other clients are beginning to notice that it takes more time to get their job done. This client alone accounts for approximately $150,000 of Danny’s revenue stream and Danny feels he can do nothing about it. Danny is so exhausted serving this client and he has no time left to plan for the future of his business.

Don’t think you are exempt if you own a product based business, the same principle also applies. In product based business, resources are often pulled from stars to promote duds. For example, the creative founder thinks of a genius product he is sure the whole world will love. After months of pouring man power and marketing dollars into the product, the owner refuses to admit he has a dud but rather pulls resources from more successful products to serve the dud.

All past investment in the product is sunk costs. Sunk costs are investments we have made in the past whose outcome might not be too favorable to us in the present. Rather than admit to ourselves that our original ideas was not so good, we continue to pour resources on the project or product line, hoping it will turn around. Refusing to admit past mistakes will prevent us from moving forward in the future. In both case the problem child be it a client or a failed product can pull down the business. The owner must sit down to plan and re-allocate its scarce resources. No business can do it all: As a business owner you have to watch out to ensure that your resources are not being used to fund problem children but rather you want your resources focused on opportunities.

Freedom Killer #2: Thinking you know it all creates a business which cannot scale

You have structured your business to be centered on you. You wear all the hats needed to deliver value in your business. Your role ranges from sales man to the floor sweeper. This is a very stressful way to run a business! Delegation is a necessary part of growth. Thinking no one can do what you currently do as well as you do is the surest way to keep yourself enslaved to your business. The difference between a strong company and weak company are its people using their knowledge to move towards a predefined direction. How much money you make each year is important, but how you earn that profit will have a greater impact on the value of your company in the long run.

Freedom Killer #3: You skip planning for the financial future of both you and your business

Without a plan they can be no focus or motivation. A person who has a vision they single mindedly believe in will achieve that vision. A focused mind is like a person who is being chased by a lion: he/she quickly discovers they are able to run very fast. Your single minded focus of avoiding being eaten creates in your abilities that you did not even know existed. Skipping the planning process is the surest way to ensure you stay where you are today. Without focus, you will lack direction and fulfillment.

In summary, it is so easy to be tied up in the things that steal our freedom in our business. We need to make continuous effort to keep sailing in the right direction. Having a plan is the best way to start in the right direction.