The Freedom Pivot: The Operator → Owner → Investor Shift

0:00What got you to a million won't get you to 10 million and further. You might push to three, but then you end up being trapped because you become the center of it. Today is about making sure that we're not just about success. We're also about freedom. Ultimately, you've got to build a business that you own rather than a business that owns you. You didn't start a business to be busy. Okay, you started a business to be free. Well, hey, welcome to the$100 million entrepreneur podcast. Today, we're going to look at the freedom pivot. What does that mean? You know, most entrepreneurs, when they start hitting a level of success, don't feel free.

0:34They actually feel more trapped by the business. Now, in business, we all know you're going to have an exit. OK, the question is, is it a negative exit, meaning you kill it or it kills you? Is it a passive exit, meaning that the business runs without you? Or is it a financial exit, meaning you sell the business for a great deal of money to set yourself up for the future rest of your life? so that's really what we're meaning by freedom you know the business should buy back your life not the other way around so if you've built success but not freedom today is about fixing that today is about making sure that we're not just about success we're also about freedom from it so growth can quietly trap you okay so there's an illusion of success is that more will just create more and that as you grow the business, once you've hit millions and once you go further and you hit maybe 10 million sort of thing, that you think that just doing more will set the freedom up.

1:36Well, there's three stages of evolution. There's the operator, the owner and the investor. OK, and the mindset required for each of these is different. So if you could imagine the operator is when you're doing the work, OK, you are the business. Essentially, you are the cornerstone of what happens, you're the cornerstone of everything, decisions come through you. Now, that also means you're the bottleneck. So what got you to a million basically won't get you to 10 million and further. You might push to three, but then you end up being trapped because you become the center of it. Well, that operator has to learn to become the owner.

2:12And if you look at our previous editions, we've covered that subject. From the owner, though, we need to move on to becoming the investor. What does that mean? Well, we transition from cash flow and profitability into a capital value of the asset. We transition from building something that is just about more profit, more revenues to something that is scalable and saleable, meaning that you can actually sell it as an asset. So you become more of an investor in the business. Looking at an ROI, Why? You move from taking a salary, taking drawings to really taking quarterly profit distributions from the business, building an asset based business.

2:54You know, usually when people come to me and looking to sell their business, I tell them it's going to take generally three years, two years of clean financials, two years of setting it up systemic, getting it running without you. And then finally, a year to make the sale happen where you go through the due diligence with multiple potential buyers and so on.

3:14Brad:Now, the reason I say that most entrepreneurs stop at the owner level, meaning they get to a point where the business can work. They've got a level of freedom. The business is making money. They don't have to work 40, 60 hour weeks anymore. They've got a business with systemic operations, good people, good leadership in the company. but to evolve to an investor we've got to think of it in a different light see when you get to the investor level you're usually thinking about things like uh should we buy through acquisitions and and grow through acquisitions should we be buying customers by buying other businesses should we be buying team members by buying other companies opening a new geographies by buying other companies so you turn from that operator growing through uh normal organic growth to the investor who looks to be growing through acquisition.

4:10Brad:So if we look at, I mean, let's go back to that whole freedom thing, because freedom is not just money. Freedom is about time. It's about choice. It's about control. So to build a business that gives you freedom, we go back to my definition of a business, a commercial profitable enterprise that works without you. Then we develop the freedom. Now freedom with passive or freedom with a financial exit, two different levels of freedom and it's really up to you which one you want, but it could also be up to market cycles and market timing and who's buying and what multiples are they paying at this point in time.

4:47Brad:Sometimes when we get to this stage, more becomes the enemy of better. What do I mean by that? Well when you start thinking about building a better mousetrap, when you start thinking about it's not just about volume it's also about getting more profitability it's also about getting better systems better team members better technology better branding all of those sorts of things because one of the challenges that hits the old mindset of what got you here won't get you there what got us to to three million what got us to a million what got us to 10 million these things won't get us to that next phase the same as sometimes we think more people will know sometimes we need better people.

5:29Brad:It's more marketing. No, sometimes we need better marketing. Sometimes it's, you know, in many ways, we have to think of the fact that to create the freedom, we need a quality of person, a quality of system, a quality of team that actually runs it without you. So if you look at the freedom equation, okay, systems times leadership, and then the wealth strategy that comes with it. So let's break that down. Systems. Obviously, the business has to be systemic so that 80 % of what happens every single day operates by systems. Now that could be technology systems, AI systems, human run systems, but 80 % has to be systemic of the business.

6:10Brad:20 % is if you build great people so that they handle the 20 % that is humanized that needs to be handled by a person. Leadership is where that 20 % really kicks in, building great leaders. You know, to get to a million, you were the manager and you managed the team. To get to 10 million, you had to build a team of managers and you had to step up to be a leader. To get to 100 million, you need to build a team of leaders and you step up to be the leader of leaders. That's where a real CEO kicks in, because now you have C-level executives around you. You've got a team of C-level executives, so systems times leadership, and then there needs to be a wealth strategy.

6:49Brad:So that wealth strategy can come in when you're looking at, am I going to build it to sell? Am I going to build it to run without me and invest my money elsewhere? That's where the freedom kicks in because when you have the systems and the leadership and a strategy for the finances of the business, whether it be investing the money back in the company, buying other territories, other businesses, other markets, opening other things, bringing in other products, services, buying a technology platform, whatever it is, you can be reinvesting in the business or you can be reinvesting external to the business.

7:23Brad:Now, as a coach, I often refer people to the fact that you don't want to have all your eggs in one basket. You ultimately do want to build wealth outside of the business. And so learning how to invest in things like real estate, stocks, other areas of the market, working with financial services, companies, financial planners to be able to get yourself to that freedom level. So one of the key factors in getting to freedom is identifying your bottleneck. Now, obviously I've referred to in different circumstances where you might have become the bottleneck. Maybe someone on your team has become the bottleneck.

7:58Brad:I know just recently I had to have a chat with one of my team and say, listen, you're bringing everything through you. It's gone from me being the bottleneck to now you being the bottleneck. So in that particular company. You know, many years ago, I gave up the decision making criteria being me and handed it to the C-level executives. But when one of those executives starts to become the bottleneck for the others, it's like, hang on, whoa, whoa, we need to step this back a little bit. Maybe your business model is the bottleneck. You know, I've sat with a lot of people and they've gone on a business model evolution, meaning that they've gone from a single office to multiple offices, or they've gone to a licensing model or they've added a franchise or a rental business model, or they've said, you know what, we're selling one at a time.

8:45Brad:Let's move to a subscription or a membership type model. You know, all of these different ways of moving it. I had one client who was direct to customer and I said, well, have you ever thought of opening a wholesale division of the business? And he never had. But by moving to a wholesale division, it meant he could spread worldwide, not just local to where he was. And that changed the model of the business, which changed the bottleneck strategy of the business. So I think one of the biggest things we have to do in order to move from building a business to freedom is to, first of all, look at our calendar.

9:22Brad:I think that one of the most effective strategies I do every single year is sit down and say, OK, what am I going to drop off from last year? And we want to get rid of about 80 percent of last year's tasks. Now, not because we want to get rid of all 80%, but because we want to free up time to do the new things that need to be done to grow to that next level. You know, if you're still doing the same activities this year as you did last year, then it's going to be a real struggle for you to grow to that next level. So if you look at your calendar at the end of the year or maybe do it now, if you didn't do it at the end of the year and say, what were the tasks on my calendar last year that I need to move off my calendar?

10:02Brad:I need to either delegate them, which to delegate something, we all know, you've got to build a system, you've got to build training, and you've got to build a measure. So those three things need to be in place in order for you to delegate something. Otherwise, it's just pure abdication. So once we delegate or get off of our calendar 80 % of the things we did last year, and sometimes you don't even have to delegate it. Sometimes you just have to say, no, that does not need doing any more. We're just going to do these things that move the needle. So what we try and do with every client we coach is help them build a perfect calendar, meaning in an ideal week, Monday, I would do these things at these times, Tuesday, Wednesday, Thursday, like you build the personal, the perfect calendar.

10:48Brad:We call it a default diary in a default world. These are the things I do in those times. And so your high priority tasks, obviously, at the start of every single day, you get those things and build that calendar. So second thing we got to look at is decision flow. Oftentimes bottlenecks are not obvious until you examine decision flow. The moment you get into the decision flow, you realize, hang on a second. Now I see that because decisions all have to go through this methodology, I'm seeing where we're actually getting the negative results, if that makes sense. So use the decision flow and start examining decision flow around finances, around marketing, around hiring, around growth, around customers.

11:33Brad:Look at all of the decision flow and see where it is. Third, we look at where you find yourself firefighting. Wherever you find yourself putting out fires, fixing problems, diving in, having to help and solve things, that's generally where we're going to find freedom is being sucked away from us. So it's really that freedom pivot. And you know, when, if I look at, for me, building freedom, the first time I decided to retire, I was very lucky in that I had a great chief sales officer who came to me one day and said, Brad, I think you're done. And we were at a conference and I thought he was saying to me, I think you're done for the day here at the conference.

12:10because I was getting a bit annoyed and abrupt with people. And I said, yeah, you're probably right. I should go and take a break. He said, no, no, I think it's time for you to take a step back and let us run the company. And at the time, it didn't feel great. Not being wanted or not being needed was sort of that first negative feeling. But when I recognized that he was giving me an opportunity to take true freedom in my business, I think it was a very important step for me to step back and do that. Now, I did step back in to run the company after many years because I think I was ready to again.

12:45I had my passion back. I had my excitement back and really got to that point. You know, ultimately, here's the thing. You've got to build a business that you own rather than a business that owns you. OK, so how do you get to be the owner and then the investor, that freedom level?

13:04Brad:Start planning for it now. Start thinking about it now, because ultimately you didn't start a business to be busy. Okay, you started a business to be free. So let's build the time freedom, choice freedom, all of those things. I'll see you back here next week on the Entrepreneur Podcast because building you to be a$100 million entrepreneur is what we're all about. Thanks for joining me on the$100 million podcast. If you've got value from today's episode, make sure you've subscribed and share this with all of your friends. Never miss a strategy that could change your business and your life. And remember, the fastest way to scale is to learn from those who've done it.

13:39Brad:That's what this show is all about. See you on the next episode.