EP 267 - Build a business Worth Owning
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Let me start today's episode with a question. Are you intentionally building your business, or did you accidentally create a job for yourself? Now, if you're a business owner listening to this, you might be thinking, "Maggie, I definitely build a business. I have clients, I have revenue, I have a website, a business bank account, maybe even I have employees."
And yes, I'm not saying you don't have a business, but what I'm asking you to consider is what kind of business have you built? Because there is a huge difference between building a business strategically and intentionally and owning an asset Or owning a job that happens to have your name on it
and this is particularly common with service businesses because usually you start your [00:01:00] business because you're really good at something. Maybe you're a designer, a financial professional, a therapist, a photographer, a contractor, a beauty professional. You have expertise. You know how to help people, so then you decide, "I don't wanna work for somebody else anymore.
I'm going to start my own business." And hey, that is probably the best decision you've ever made. I made one like that because we get freedom, autonomy to make our own decisions, to build something out of an idea and imagination. We get to choose who we work with. We get to make all the decisions and potentially make more money than you could have ever made working for somebody else.
By owning a business, we can also [00:02:00] create life we actually want. But here is where I see things go sideways with many business owners. You get your first clients, then you get more clients, then more, and then you're busy. You're making money, you're doing what you're good at, but then somewhere along the way, without even realizing it, you just created a job and you're tied to it 24/7.
Except now, you don't have a boss, you are the boss. There is no one to cover you because every decision and every person depends on you
And even if there is a vacation policy, because everything has to go through you, if you stop working, the revenue might stop too, or go down considerably. So today I wanna talk about something that has become central to the [00:03:00] way I think about business. Don't just build a business, build one worth owning
And it's not just about building a business so you can sell it one day eventually. You might, and that's great, but you might not, right? So that's not the only point. I'm talking about building a business that it's genuinely valuable for you to own, a business that gives you something back, a business that creates value for your customers, but also your team and you as the owner, a business that can grow without everything becoming more complicated and more dependent on you or creating more stress and overwhelm for you I'm talking about the business that can eventually become an asset and not just a simply source of your income, personal income or work
And what I [00:04:00] wanna tell you is that the sooner you start building your business this way, the easier it is to get there and the easier it is to scale it. You don't need to wait till you hit, multiple six figures or a million dollars in revenue. You don't have to wait till you have 20 employees to get there.
You don't have to wait, until you're burned out and you feel like unless you change something, you'd rather close the business than keep going. You can start thinking this way and building this way now, and definitely don't wait until, years and years passed and now you wanna sell your business in the next few years.
So let's go back to the beginning. Most people don't start the business thinking, "Hey, I wanna build an organization with strong infrastructure, defined processes, high-performing team, and healthy margins, and then transferable value." Most people [00:05:00] don't think like that. That's not usually what motivates someone to become an entrepreneur.
They're thinking, "I want freedom. I want to solve a problem, and with that, I want flexibility. I want to make more money. I do wanna enjoy what I'm doing. I don't wanna work in corporate anymore. I don't wanna work for somebody else. I want to be my own boss."
I wanna have time for my family. So there's absolutely nothing wrong with that. In fact, those are wonderful reasons to start because they give you excitement and motivation to start
The problem is that we often don't make the next mental shift. So we learn how to do the work, but then we don't learn how to build the business that delivers the work consistently at scale to the customers we help So then the business becomes completely centered around the [00:06:00] owner In a way where you sell the service, then you deliver the service, you answer the emails, solve all the problems, manage every client minutia details and issue.
You do the marketing, make all the decisions, handle the money, you train everybody, and then you wonder, "Why am I working more now than I ever did in any job that I had?"
Because in a way, you build a business around your own capacity and not something that gives you leverage. And of course, our capacity is limited. There's only so many hours in a day, and there's only so much energy we have each and that energy translates into focus and attention, and that's also limited. Eventually, you become the ceiling to your business growth if everything centers around you
So let me make this distinction very simple. In a job, you trade your time and [00:07:00] expertise for a compensation that you agree on, right? And when you're self-employed, of course you can do exactly the same thing, right? Yes, you can have a much nicer job or more flexible job and better paying job where you choose your clients, but it can still be a job where unless you trade time for money, you're not making any other income
But a business is when there's something different happening. It happens when a value can be created and delivered through something bigger than just the owner's individual effort, right? That doesn't mean you're still being involved. That doesn't mean you can't be the face of the company or that you can't personally serve customers if you love it. It also doesn't mean that you have to build some giant corporation, another Amazon. But it [00:08:00] means that you developed leverage through the business, and that's processes, people, and systems, technology, intellectual property, relationships, financial structure, a brand
So that your time isn't the only thing producing value. Revenue alone does not tell you whether you've built a real business. I've seen small businesses with very healthy revenue that are beautifully designed, and I've also seen larger businesses where the owner is still the bottleneck for every major decision.
So don't think that, oh, once I hit $1 million in revenue, then I'll start building systems. Because building systems is how you can get to a million without overwhelm, without [00:09:00] burnout
So don't wait for growth and scale to force you to become a better business owner because it's gonna be very painful to do it. Build the business in a way that can actually support the growth you're asking for and the life you would love to have
So what makes a business worth owning? And this is the question that I want to answer today. What does worth owning actually mean? For me, it starts with this. A business worth owning creates value beyond the owner's personal labor. And there is few dimensions to that. First, it is profitable. Not just generating revenue, but profitable because revenue is not the prize.
I remember when I was working for one of the larger corporations, there was a division in that corporation, that wasn't [00:10:00] my division, but a different division, that was making, I think, billions of dollars worth of revenue because they were running huge projects, but the profit was minimal. Minimal to the point where it forced the corporation to rethink because people were working hard, stressing themselves out to not benefit from anything.
They couldn't even get proper bonuses because the bonus was based on, partially on profit. And all that stress and responsibility and risk that the corporation took was almost not worth it. With the division I worked for, we had much less revenue, but we were the money maker for the company. We were the ones that were giving a healthy profit to the company, which then we benefited through bonuses [00:11:00] at the end of the year.
So if you have a million dollar coming into the business but almost nothing left at the end, and you're working 80 hours a week, you haven't necessarily built a great business. You might have built a very busy business
But busy and successful are not the same thing unless that's how you define success. Being busy, overwhelmed, and just having a prize or the satisfaction of generating high gross income. For me, a business worth owning means you have healthy economics. And in order to do that, you need to understand what you're selling, what it costs to deliver it, what it costs to acquire the customers, what are your margins look like, and what the business [00:12:00] actually contributes to your life.
Because as human beings, I believe we're more than just our professional part of life. There is also personal and spiritual part of life that, of course, a healthy business will be able to support you in that, while still maintaining healthy margins so you have money and funds to keep reinvesting in the business, to keep growing it.
Second, the business creates real value for customers. So people shouldn't buy from you simply because you're working hard. They should buy because you solve something that matters to them. You solve their true pain point, or you help them get what they deeply desire. Ideally, the business has a clear, repeatable way of creating value
[00:13:00] Because if your entire value proposition is, "I'm amazing," and it's because you like me and I'm your friend, and you need me personally, that's the only reason you buy, then yeah, you've created a very difficult business to scale. Yes, your expertise matters and your personality matters, and all your relationships matter, but the business needs to be able to translate that expertise into repeatable customer experience and outcome
Third, the business doesn't completely depend on you. And I wanna be very careful here. I'm not saying you should make yourself irrelevant, unless you want to in your business, because of course, you're the owner. You're the visionary. You started the whole thing, right? You might be amazing in building relationships.
[00:14:00] You may be the face of the brand. You might have an important role in sales or research and development, and that's okay. The question is, does everything stop when you stop? So if you take a week off, does the business pretty much stops running, right? If you're sick, do the customers wait to get service?
If an employee has a question, does everything come back to you, even the smallest, simplest thing?
And that's the owner dependency, and it's one of the biggest things that prevents a business from becoming truly scalable. And yes, if you're just starting, of course, everything is dependent on you because you're just starting, so you're building the resources and the capacity to be able to start scaling and removing yourself from certain things.
But if you already have a [00:15:00] multiple six, seven-figure business and everything still depends on you, you have a problem Okay, number five, business worth owning is also a business that has systems. Now, when I say systems, I don't mean you need a thousand pages manual with your SOPs, which is your standard operating procedures.
A business has a way of doing things that, yes, is documented because those are great resources for training people, and people know how things happen and why they happen, and those things are standardized where it's easy for people to learn and be successful at executing those things, right? This is where customers know also what to expect.
They experience your service at the same highest [00:16:00] level over and over again as they come back, no matter who delivers it. Employees also know what is expected of them when they're successful in the roles. You don't have to reinvent the wheel every Monday morning. And importantly, good results don't depend entirely on somebody else's memory, right?
Results are the outcomes of people following the processes and systems that have been defined and built in, and that's a very different kind of business
The fifth dimension of that is that the business has people who can take ownership. So a business worth owning isn't just built on hiring people and then becoming their forever supervisor who needs to watch over everybody's shoulder and be [00:17:00] available 24/7 to answer every simple question.
You want a business that's built by developing people who can actually take responsibility and make good decisions, people who know what do I own, what decisions can I make, what does good and excellent look like, when do I need to ask for help? That's when a team starts creating leverage for the business and the owner, rather than simply creating more work for the owner
And then the sixth part to that is that the business can grow without proportionally increasing your workload as a business owner. And this is one of my favorite definitions of sustainable scaling, because let's say you double your revenue or 10X your revenue, and that sounds fantastic.
[00:18:00] But if you also double your hours, and you probably can't 10X your hours, or double your stress and double the number of fires and issues that you have to deal with, double the number of people asking you questions every day, then is it really worth scaling like that, right? It's making business bigger for the sake of doing it, it's probably not worth it
That's why for me, sustainable scale means growth that the business has the capacity to absorb financially, operationally, with your team. But I'm always pro lean, high performing teams
Because if business growth make your business less enjoyable to own and stressful to the point when [00:19:00] you burn out, then is it really worth it, right? It's a problem
And this is why I created the Sustainable Scale System
which is the formula that I use when I do the work with service business owners. Because I don't believe that growing a business, it's just, oh, let's get you more clients, right? Or let's get you to seven figures at all costs. Because those things, of course, are useful as goals and the measurement whether you're on track or not, but the growth without the right foundation can create the bigger version of the same problem, and that's not what I'm all about.
That's not what I want for myself, nor do I want that for my clients. Because you can have more customers and less freedom, or more revenue but less profit, more employees but [00:20:00] with that, more management headaches, and you can end up hating leading people
You can even have more visibility and more demand, but then more headache trying to deliver to that. So the way I think about sustainable growth is that we need to build the business
considering several factors at the same time, right? The foundation of that is profitable positioning, so knowing who you serve, what value you create, having offers designed in a way that makes sense financially, where it's a win-win for your ideal clients and for you
And understanding your clients so deeply that you can attract the right customers and actually make money from serving them. Then there is your client acquisition engine and within this partnership [00:21:00] pipeline. Because sustainable growth isn't about constantly chasing new leads You need a reliable way of, yes, creating demand and attracting leads, but also building relationships and nurturing them so that you can also have high conversions of those leads. And you need the ability to deliver what you're selling so then the customers that try you for the first time not only buy once, but keep coming back and referring others.
And then to do that, you need the infrastructure that holds the business together, and that creates that capacity to scale without adding more work to your plate. And that's your financials, your operations, the way you manage your own time, your team. And to have a highly f- performing team, it's about your [00:22:00] leadership first and how you lead yourself, and then how you lead people.
So those are skills that you need to develop. And then of course, systems, processes, and tools. Ultimately, you becoming a high-performing CEO is what will lead to creation of the business worth owning
And this is what I mean by sustainable scale. So it's not just simple how fast can I grow, but more how can I grow in a way that makes the business stronger rather than making the owner weaker
And here is where I really want to challenge you. If you're listening to this and you're thinking, "Yeah, Maggie, it's all great, makes sense, but I'm still very small." Start now. The sooner you start building this way, the better your experience will be in being a business owner and owning a business.
Even if you have [00:23:00] 10 clients and you start seeing that there's certain things you do over and over, start documenting that. Even if you are thinking about the first employee, start thinking about what they would need to own or what should they own rather than simply what tasks they should complete
If you're still delivering all your work yourself, start thinking which part of that delivery you could potentially outsource to somebody else. And if you're at 200K or even 100K in revenue, you start paying attention to your margins, to your profit
And if you're starting to grow and you're seeing that growth speeds up or you're even expecting the growth because maybe you have a lot of quotes come [00:24:00] out or you're waiting for some deals to close and you know that definitely some of them close, you want to start building the infrastructure before you don't even have time to build it.
Because it's so much easier to build a strong business intentionally than to take cha- chaotic business and try to like retrofit it and fix it later. Of course, you can do it. I help some of my clients do it, but it's so much harder to untangle a mess and then fix it rather than just start better from the beginning
And if you're already bigger and you do have potentially team members or subcontractors or contractors helping you, I want you to do this 30-day test. If you're a solopreneur, that's obvious, you don't need to do it, but maybe that's something you can think about as you start growing. So [00:25:00] imagine that tomorrow morning you disappear for 30 days.
Just 30 days. For whatever reason, you decide to take 30-day vacation or your family needs you. And then you really disappear. So you can't answer questions, can't approve anything, can't deliver the work, you can't check emails, you can't just jump into emergencies. What would happen in your business if that happens.
Could your team serve your customers? Could someone answer new inquiries? Could someone make routine decisions? And even some, could they resolve smaller issues that cannot wait for you to come back? Could the work still be delivered, right? Could someone understand what is happening financially Could the most common problems be solved?
Could your employees find the information that they might need? They maybe not need it every day, but within those 30 days something would come [00:26:00] up and they would need it
Would your customer even notice that you were gone?
And this is not the exercise to beat yourself up, but it's more like a diagnostic, right? If your answer is, "I could not absolutely disappear for 30 days, my business would fall apart despite the fact that I have team," that's a very useful information, right? Because now you can ask yourself, "Okay what would this need to change for that answer to become a yes?"
And maybe the first time is me disappearing for 10 days. Rather than 30. You can gradually change things that would allow you to disappear for 10 days, 20 days, and then 30 days
Maybe the answer is in delegating the duties or defining the decisions constraints that the employees can take. Maybe it's training, maybe it's [00:27:00] technology or a better customer journey that's more streamlined or automated. Maybe is additional hiring Or to finally letting go of something, of some things that you've been holding on for too long
And this is what I wanna reinforce. Your goal is not to make yourself unnecessary. Your goal is to make yourself unnecessary for the things that shouldn't require the owner, and that's a very different thing
So here is the evolution I want you to think about. When you start your business, you're primarily a service provider, which is totally normal and fine, right? You're doing all the work. But then as your business grows, you become a business owner, so you're responsible for making the business work. And there is a point where you're doing both. You're the business owner and a service provider, and that can take some time. But eventually, if you wanna scale [00:28:00] sustainably, your role will need to evolve again, and you become the CEO.
And the CEO's job isn't to personally do everything. It's to create conditions for the business to flourish, to accomplish, to deliver its mission, and achieve its vision. CEO makes strategic decisions, creates clarity, builds the right team and the culture within it, helps to improve system, protects the customer experience.
Yes, understands the number, anticipates what's coming, and making sure overall that the business continue to creating value, but not doing everything by themselves
So going back to our question, what does it mean to build a business worth owning? It doesn't necessarily mean to have a $100 million company. It [00:29:00] doesn't mean that you have to have hundreds and hundreds of employees, and it also doesn't mean that you're planning to sell in the next year
A business worth owning could be a half a million dollar service business with excellent profit margins, a fantastic small team, loyal customers, strong systems, and the owner who takes six weeks off every year and works three days a week if they want to. Or it could be a five, seven, eight, 10 million dollar company with 30 employees, and it could be a business that you eventually sell to your employees or somebody else or pass on to your family member
Or it could be a lifestyle business that you just own for the next 20 years and you use it to create the life you love, travel, work from the beach, whatever that is. The size really isn't the point. The point is that it's the business creates enough value [00:30:00] that you actually want to own it, that it gives you something back, like financially, professionally, personally And yes, potentially, eventually financially becomes an asset in its own right
And that's a final reminder I wanted to leave you with is just don't wait until you're financially successful to start building a business you actually want. Because you don't wanna be that business owner who says, "Oh yeah, once I get to half a million, I'll hire someone," or, "Once I get to a million, I'll put systems in place."
Or, "If I have enough employees, only then I'll start delegating."
Instead, start asking these questions now. Is my business profitable? Or what's my break-even point if you're just starting? Is my business repeatable? Can I [00:31:00] scale it, right? Is it creating value?
Is the customer experience I create intentional and does it make sense? Is it built to retain the customer and build loyal fans
What would make this business stronger? What would make it easier to run? And most importantly, what kind of business do I actually want to own?
Because in a way, you don't need to know exactly how big your company will become. That can change. Maybe now you're thinking, "I just want 200K business or half a million dollar business." And when you get to half a million, you will be a different version of yourself. Hopefully. You will be a better CEO that will see more opportunity and be more skilled and have more capacity, and then you might decide, "Hey, I want to build something bigger."
Or you might just decide to build something different. You don't need to know all that ahead of [00:32:00] time
but you should decide what kind of business you wanna build and then start building it that way from today
And the sooner you start thinking that way, the more opportunities you will have to make better decisions along the way, and then the easier it becomes to build something truly valuable. So whether you're on your journey to your first 100K, your first million, or well beyond that, I want you to ask yourself, am I simply working in a job I created for myself or running a business that just somehow happened to be whatever it is now? Or am I intentionally building one worth owning?" Because these are very different things, and that's the philosophy behind everything I talk about here on Diamond Effect Podcast.[00:33:00]
And if you want help to build a business worth owning, a business that is profitable, that creates real value, with systems, with people who can take ownership, a business that can grow without everything falling on you and that gives you more freedom as it grows, not less, I can help you
And let's explore how I can help you in detail during a complimentary consultation. I'll leave a link for you to book one in the show notes. I'm Maggie Perotin, and this is The Diamond Effect Podcast, strategies to build a business worth owning.
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