I have a soft spot in my heart for entrepreneurs who are beginning enterprises while raising children. It’s not easy, and this week’s SUCCESS Line guest is right in the middle of it. Brian is a father of five and an entrepreneur residing in Washington, D.C.
He’s currently automating his existing firm and hopes to diversify by starting a second service-based business.
Almost every small firm reaches this point: “How do I know when I can diversify?”
I’ve said it before, and I’ll say it again: if your focus is diffused, your results will be diluted.
So many times, business owners may start a new project in the hopes that it will merely add to their present workload. It cannibalizes in actuality. Any gains from the old business are canceled out by the new business’s costs.
You increase the amount of complexity without increasing the amount of profit.
Rather, attempt servicing the same audience in a more comprehensive way; extract more juice from the same proverbial apple. Read on for my top three reminders for any small business owners wanting to diversify if you’ve ever been distracted by the “next greatest thing.”
1) Increase Your Concentration.
I’ve done enough one-on-one coaching and Brand Builders Group work to know that every single small company owner, personal brand, and leader faces the same dilemma: should I maintain doing what I’m doing now or move on to the next bright and exciting thing?
My suggestion is to double down on your emphasis, which isn’t always popular.
I could tell you to “take a break,” “follow your passion,” “find work-life balance,” and so on. But that isn’t the real success story. Nobody succeeds by balancing their life.
When you’re ready to scale your business, you’ll need to go all-in and focus twice as hard.
Why? Because, at the very least, you’ll learn something really useful. Either you’ll burst through the barrier and succeed, or you’ll know that you gave it your all and it didn’t work out—and that’s just great. I don’t think of it as a failure; I think of it as feedback.
What’s worse, if you don’t go all in and the company doesn’t scale, you’ll never know why it didn’t work out. You’ll wonder if it’s because you don’t have it in you or if it was just not meant to be. While disregarding the more likely reality that it didn’t work out because you didn’t give it the attention it deserved.
2) Increase the Pay Of Your Employees.
Look, I’m a capitalist with financial objectives and ideas of my own, but you need to pay your employees more.
To begin with, if your employees are making money, they are likely to be happier, which means they will perform better and be more productive at work. Second, if they are earning more money, they are less inclined to leave you for someone who can offer them more money.
And even if they do go, you’ll still have plenty of cash to hire the next great employee. However, if your star player goes and you paid them below market value, you’ll be in a panic about how to replace them, which is a dangerous situation to be in.
Related: Those Who Competes Earn More Money?
3) Determine Your Company’s Bottleneck.
Clearly identifying the problem you’re seeking to tackle is more than half the fight of fixing a problem.
To win, we must answer the following questions:
What is it that is actually holding me back?
Where exactly am I stymied?
Often, you’ll discover that it’s just one minor limiting notion or technical ability that you lack.
Determine where the bottleneck is and then eliminate it. “How do we resolve this?” is a question that requires all of your imagination.
When you question how your brain will focus on it subconsciously, and one day you will awaken to learn the answer. It’s not about coming up with the proper response; it’s about asking the right question. Your brain will process and discover the answer faster if you can pinpoint the particular bottleneck.
As a beginning entrepreneur, you may not have the financial resources to pay the top tiers right away. However, the long-term goal should not be to pay people as little as possible in order to get the most out of them. “How can I get my people—my clients, referral partners, and team—to make money as fast as possible?” is the goal. You, too, are making money if all of these folks are.