Are You A Prison Builder?

The Self-Employed Trap

Many people start their businesses to escape the constraints of having a boss. They want control over their work and believe their skills can drive success. However, there's a significant difference between being self-employed and being a true business owner. The main obstacle to becoming a true business owner is often the self-imposed prison created by remaining self-employed.

Understanding Business Disciplines

Revenue Concentration: One common issue is revenue concentration. For example, I recently spoke with a kitchen joinery business owner whose single client provided 45% of his revenue. This high level of dependence on one client poses a significant risk. Best practices suggest keeping any one client’s contribution to around 12-20% of total revenue to mitigate risk.

Supplier Diversification: Similarly, diversifying your suppliers is crucial. Relying on a single supplier can trap you in a vulnerable position. Diversifying ensures you’re not overly dependent on any one source, allowing more control over your operations.

Avoiding Personal and Professional Prisons

This concept of self-imposed prisons extends beyond business to professional and personal life. Professionally, being known for just one thing can limit your growth and satisfaction. Overworking can lead to poor health, strained relationships, and dissatisfaction.

Reflect and Act

Take a moment to reflect on these questions:

• Are you self-employed or a true business owner?
• Are you a technician, or are you managing and leading your business?
• What steps can you take to transition from self-employed to business owner?

Evaluate your life for any self-imposed prisons:

• Business: Are you at risk due to revenue concentration or supplier dependence?
• Professional: Are you pigeonholed into one role or expertise?
• Personal: Are your health and relationships suffering due to work pressures?

Making the Change

Understanding these concepts and learning how to manage them is essential.

Seek help if needed. Find a mentor or coach who can guide you through this transition.

It’s crucial to learn about revenue concentration, managing costs, and building a sustainable business model.

Remember, simple questions can lead to profound changes. Are you building a business that gives you freedom, or are you constructing a prison that limits you?

Stay tuned for more insights on transforming your business and life.