I run into a lot of entrepreneurs on Startup Guild that struggle with the idea of letting go of control of their business. But it is a necessary step if you want to grow your empire.
You see, many businesses have a cap, but it’s not like what you think. For the sake of easy example let’s use a brick and mortar business that everyone will understand, a restaurant.
Let’s say you run a restaurant in Los Angeles. Hopefully you reach a point in your journey where you are consistently busy and the tables are full. If the tables are full, you are at your cap there. However, there are still ways to make more money.
The first of which is raising the prices. That’s how supply and demand works. If you have a six month wait list, like French Laundry did when I went there, you can demand $250+ a meal. That’s because people are willing to pay it. Granted, this was a 3 Michelin Star restaurant in Napa Valley with a celebrity chef and an 11 course degustation menu. But there’s no reason you can’t set high goals for your business too.
Once you’ve done what you can with filling the seats and raising the price, you can move on to other things such as up-sells. In the restaurant example that would probably be alcohol (wine, champagne mostly for high ticket up-sells).
At some point this will also reach it’s cap and you’ll be at French Laundry prices, where they can demand xxx% markup on wine and actually get it.
Now that the business is running smoothly and you’re maximizing everything you can, you have certainly done your job as an operator of that business.
At this stage you are at a pivotal crossroad. You can continue to be the operator of the business and work on small tweaks here and there to increase your revenue further, or you can hire someone to replace you and move on to the next restaurant or business.
Most smart entrepreneurs once they reach this true and final cap will start the next restaurant/business. That’s because there is more money and expansion in starting something new rather than improving something that you’ve already maximized very well.
The key here is finding someone to replace you that can do close to as good of a job as you can. You may or may not find someone right off the bat that can do it as well as you can, because you have run it for a long time and have the inside experience with this particular business.
A lot of people get stuck here because they don’t feel that they can find someone to run the business as well as they can, or because they aren’t sure if the next venture will be successful. And they don’t want to increase their expenses by replacing themselves and hiring someone to do what they did.
But, think about it this way. You can always go back to that main business. You can test the water so to speak and see what happens. Growth and expansion is worth the risk. You’ve already done it once, you can do it again!
A lot of people get “stuck” in this phase and just end up managing that one business instead of expanding upon their entrepreneurial journey with new challenges.
And the amazing thing that happens when you really push yourself is that you grow and get smarter as an entrepreneur. Skills that you will develop in the next thing may ultimately come back to help you in the first business, to raise that cap that we spoke of. You can still have a say in that first business but just be far less hands on.
Take a chance and expand your business. That’s how thousand-airs get to millionaires and how millionaires get to billionaires. Most of the very successful entrepreneur friends of mine have at least 10 businesses that they are involved in.