Many small business owners find themselves stuck in a cycle of behaviors that prevent growth and long-term freedom. While they’re often doing the right things, they may be executing them in the wrong ways. A clear growth strategy is essential for moving beyond survival mode and building a sustainable, scalable business.
When starting out, business owners typically wear every hat in the organization. They handle operations, marketing, sales, and even customer service. While this is often necessary initially, long-term success depends on transitioning from being the primary operator to becoming a strategic director of the business. This shift allows the company to run itself, market itself, and even sell itself without constant hands-on involvement.
Delegation Is the Key to Freedom
Delegation isn’t just a management tactic; it’s a growth strategy. Effective delegation allows a business owner to focus on directing the company instead of being bogged down by day-to-day operations. However, transitioning from operator to director is challenging and requires a mindset shift.
Here’s a crucial tip for making that shift:
Pay yourself as an operator if you’re operating, not as a business owner taking profits.
Even if your income doesn’t change, this mental shift is important. For example, if you’re working full-time in your business and see a 40% profit margin, you might be misinterpreting your success. That profit isn’t accurate unless it accounts for your operational role as an expense.
Understanding True Profit
Let’s break this down:
If you pay yourself a salary for the work you do, you can separate your operational role from the actual profitability of the business.
Even if you pay yourself more than you’d hire someone else to do the same job, that’s fine—as long as you’re accounting for yourself as an expense.
The real measure of success is whether the business is profitable after covering your salary and all other expenses.
By viewing yourself as an employee when you’re operating the business, you’ll gain a clearer understanding of its financial health. This clarity is essential for creating a stable operational budget and setting the stage for growth.
Building a Self-Sustaining Business
If your business can remain profitable after paying yourself a competitive salary, you’re on the path to independence. You’ll have the flexibility to reinvest profits into growth, hire team members, and eventually step back from daily operations. Without this step, the business will always depend on you, blurring the lines between your personal finances and the company’s needs.
If you’ve reached the point where you can pay yourself generously for your operational role and still achieve strong profits, congratulations—you’re not just running a business; you’re building a scalable, sustainable enterprise with massive growth potential.
This article should not be considered business advice ; it is purely the opinion of our editorial team. Every business owner is in a different stage of business and requires different strategies and decisions to succeed.